Hong Kong share prices are likely to trade firmer on bargain-hunting this week following recent heavy losses but gains will be capped ahead of debut trading by the Bank of China, dealers said.
They said interest rate worries will continue to keep the market in check.
For the week ending May 26, the Hang Seng Index plunged 418.26 points or 2.60 percent, at 15,895.10.
This week, the index saw a biggest one-day drop of more than 500 points in years amid fears that higher interest rates will slow global economic growth and following a steep drop in commodity prices.
While dealers believe the worst could be over, they said investors will closely watch key US economic data including April consumer spending and May consumer sentiment index due out later Friday for clues about rate movement.
"I think investors will snap up bargains this week and that should provide support," said Francis Lun, general manager of Fulbright Securities.
Philip Chan, research head at CSC Securities, said the expiry of May futures contracts this week and Bank of China's trading debut on Thursday will be the main local factors impacting trade.
"We should expect rangebound trade this week ahead of the futures expiry and BOC's debut on Thursday," he added.
Lun believes the main index should "easily" breach the 16,000-point level with a support level of 15,800 points. Banking stocks should rebound following heavy losses, he added.
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