Hong Kong shares are set to stabilise and move in a narrow range this week on continuing worries over the outlook for interest rates after a Fed official issued a fresh warning on rising US inflation, dealers said.
They said repeated warnings by US Federal Reserve officials this week on rising US inflation and Wall Street's subsequent losses weighed on sentiment.
The warnings have led the market to plunge below the psychological 15,000-point mark with the Hang Seng Index ending the week to October 7 down 580.73 points or 3.8 percent to 14,847.79.
"In the short term, market sentiment will remain cautious," said DBS Vickers Director Peter Lai.
Rate-sensitive property stocks could extend falls. However, the interest rate concerns have been partly digested and the market is set for consolidation in the holiday-shortened week, he said.
Investors will closely watch the key US economic data due out later Friday which should set the direction for the market.
The US will release later nonfarm payrolls and unemployment data for September and wholesale inventories and consumer credit data for August.
The release of the minutes by Federal Open Market Committee next Tuesday will be the focus of investors.
For the medium term, Lai was optimistic as positive economic data and sufficient foreign funds will support the market.
The main index is likely to trade at a support level of 146,000-14,800 point level.
The market will be closed on Tuesday for a public holiday.
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