Hong Kong shares look set to hover this week around current levels near 13,000 points, consolidating after a run-up over the past month.
Textile plays such as Texwinca Holdings and China's largest cotton textile maker Weiqiao Textile Co Ltd may see selling pressure after the Bush administration said it could move to protect US rivals from an expected flood of clothing imports from China, but retailers on expected strong retail data.
With Wall Street off for Labour Day on Monday, a quiet start to the week was expected, ahead of congress testimony by US Federal Reserve chairman Alan Greenspan.
The blue chip Hang Seng Index gained 1.01 percent last week to close at 12,948.10 points on Friday, marking a 5.8 percent gain since beginning of August.
Analysts said oil prices could run up again if supply concerns worsen due to any pipeline sabotage in Iraq or worries over production at Russian oil company Yukos. NYMEX October crude futures ended at US $43.99 a barrel on Friday, more than $5 off their recent high.
A strong US jobs report on Friday meant investors would scrutinise Greenspan's comments even more closely for clues on future interest rate hikes. The Labour Department said employers added 144,000 workers to their payrolls in August, and revised upward hiring numbers for the previous two months.
Traders said sentiment on the Hong Kong bourse would not be affected by legislative election on September 12.
Retail stocks look set to draw some buying this week as the weeklong National Day holiday approaches. An influx of mainland tourists are anticipated to stream into the city starting October 1, snapping up jewellery, clothes and cosmetics.
On Monday, the Hong Kong government is expected to say retail sales jumped 13.3 percent by value in the 12 months through July, according to a Reuters survey of six economists. July sales volumes were seen rising 9.7 percent from a year earlier.
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