Hong Kong share prices are likely to remain weak in the coming week on persistent worries over the outlook of US and local interest rates, dealers said Friday.
They said there are also concerns that liquidity will be under pressure due to Bank of China's huge initial public offering.
For the week ending May 19, the Hang Seng Index plunged 588.50 points or 3.5 percent, at 16,313.36.
Dealers said many investors remain cautious due to the uncertain outlook for US interest rates and mixed signals emanating from US economic data.
Hong Kong shares plunged 2.10 percent on Thursday tracking heavy losses on Wall Street after US inflation data fuelled concerns of a further rise in US interest rates.
"Investors are still cautious about the rate movement. And the US dollar is still unstable, which is affecting the gold and commodity market. This will continue to impact market performance next week," said Conita Hung, head of research at Delta Asia Financial Group.
She said investors will closely watch key US economic data due out next week, including first-quarter gross domestic product as well as consumer spending and homes sales for April.
The stocks may stay weak as liquidity in the market is being squeezed because of large IPOs following the huge response from the 11 billion dollar IPO of the Bank of China.
Market sentiment will also depend on how other Asian markets perform.
Hung expects the main index will test the 16,000-point level and trade at a strong resistance of 16,500 points.
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