Hong Kong share prices are expected to stage a technical rebound next week, building on Friday's modest upturn after substantial losses this week, dealers said.
They said investors will watch a series of US data for a clearer lead on the US economy and especially the outlook for interest rates after strong wages data upset expectations the US Federal Reserve would keep monetary policy unchanged going forward.
For the week to September 8, the benchmark Hang Seng Index was down 277.96 points or 1.6 percent to 17,145.76.
"The market will be watching US data coming out next week," said Castor Pang, strategist at Sun Hung Kai Financial Group. Data showing a higher-than-expected increase in US wages and strong growth in the services sector have sparked concerns that the Federal Reserve may resume its interest rate increases at its meeting later this month.
Next week will see the release of US July trade balance, retail sales and the consumer price index for August.
Despite the latest concerns over US interest rates, "it looks like there's still room for the shares to rise. The market will be tracking Wall Street's performance," Pang said.
Dealers said a key focus will be changes to the city's blue chip Hang Seng Index next week. China Construction Bank (CCB), Hong Kong Exchange and Clearing (HKEx) and Foxconn, will join the Hang Seng Index constituents from Monday, having already drawn strong interest ahead of the change.
Stocks whose weightings on the HSI will change following the index reshuffle, will in turn likely face selling pressure. They include China Mobile, Hutchison Whampoa, and global banking giant HSBC which will see its weighting cut to 25 percent from 29.12 percent. Pang put the trading range for next week at 17,100-17,300 points.
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