Bargain-hunting should push Hong Kong stocks higher early next week before they are overtaken by fears of high interest rates in the US and Japan, dealers said.
They said concerns over growing bird flu cases in the region and recent poor earnings from local companies are likely to put the market under pressure in the short term.
"At the moment, there seems to be more bad news than good news," said Andes Cheng, associate director at South China Securities.
For the week ending March 10, the Hang Seng Index dropped 357 points, or 2.26 percent, to close trade Friday at 15,445.05.
Cheng said although bargain-hunting is likely push stocks up early in the week, investors are worried about the outlook for interest rates after US government bond yields rose to multi-year highs early this week.
They also are worried that interest rate hikes are imminent in Japan after the Bank of Japan ended its ultra-loose monetary policy as the country appears to be escaping from deflation after core consumer prices increased for a third straight month in January.
"Although some people expect Japan's interest rates will stay low for some time, they are also worried when it will start raising its rates," Cheng said.
He said fears for worsening bird flu situation and recent lower-than-expected earnings released by companies, including Cathay Pacific and Hang Seng Bank, are likely to weigh on sentiment.
Cheng expects the main index to trade between the 15,200-15,600 point level.
Comments
Comments are closed.