Hong Kong share prices are likely to remain volatile next week in choppy trade on concerns inflation will push US interest rates higher even at the risk of slower growth, dealers said Friday.
They said the latest downturn wiped out most of the gains made so far this year and left the market in danger of a continued slide, especially if the bogey of higher interest rates combined with slower growth comes about.
For the week ending June 9, the Hang Seng Index fell 462.60 points or 3.0 percent at 15,450.11. "I expect the market will continue to be volatile next week. Funds are really unstable. There isn't a direction in the trade. The interest rate pressure is still there," said Conita Hung, head of research at Delta Asia Financial Group.
"The fund flows are not leaving the region yet but investors are planning their next move in the second half year. I believe they could wait for the market to come down before entering it again," she added.
Investors would closely watch some key US data for direction next week. The US will release consumer prices and producer price index for May. The Federal Reserve will also release its "Beige Book" survey.
Rate-sensitive property stocks will still be weak in the near term, dealers said. Hung believes the main index could trade as low as 15,200-point level and test 15,700 points.
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