Hong Kong stocks are expected to stay volatile next week but any losses will be limited by ample liquidity as investors are bullish about the economic outlook in China, dealers said Friday.
"I think the market will remain volatile next week and for now there's no catalyst for an upside as new stocks are sucking out a lot of the funds in the market," said Ben Kwong, head of research at KGI Asia.
Despite the weak performance on the Wall Street and on US dollars, he said sufficient fund inflows attracted by China's growth story will continue to provide support for the local market.
Kitty Chan, director of Celestial Asia Securities Holdings, said the market traditionally performs well in December and she expects a rally this month although it might not break record highs.
"On the whole, the market won't be too bad, I would expect a rally but will it break the last record? that's the question," she said.
Y.K. Chan, strategist at Phillip Asset Management, predicts a recovery of the market next week.
"The so-called 'hot money' or speculative institutional investors are continually chasing after the China growth story and I expect them to continue buying H-shares," he said.
He added that China financials will likely remain a favourite among H-shares because they are widely tipped to be one of the major beneficiaries of the continuing robust performance of the Chinese economy.
For the week to December 1, the index tumbled 569.48 points or 2.95 percent to 18,690.82.
Kwong expects the benchmark index to trade at a support level of 18,500 points and could test 18,900 point mark.
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