Hong Kong share prices are likely to move within a narrow range in quiet trade in Christmas week tracking Wall Street's performance, dealers said. They said investors will switch their attention from China to the US after they shrugged off Beijing's latest interest rate hike as the move had been well anticipated.
The increase in the key lending rate was milder than expected. China's central bank announced Thursday that it was raising the benchmark one-year lending rate by 18 basis points and the one-year deposit rate by 27 basis points, in its sixth rate hike this year.
Dealers said investors will be kept on the sidelines as they watch key economic data coming out of the United States, including new home sales for November and consumer confidence for December, for direction. Uncertainties over the extent of the subprime troubles in the US will continue to dampen sentiment, they said.
"The market will be news driven next week. It will go up and down as there are too many uncertainties," said DBS Vickers sales director Peter Lai.
"The subprime problem is a concern and there are the worries that more financial companies will disclose their exposure to it," he added. Francis Lun, general manager of Fulbright Securities, also believed the subprime crisis will remain a concern but the market will largely stay quiet during the Christmas and New Year holiday.
The market will have a half-day session on Monday and will be shut on Tuesday and Wednesday for Christmas. For the week to December 21, the Hang Seng index was up 63 points or 0.23 percent, at 27,626.92. Lai believes the benchmark index will trade within the range of 26,000-29,000 points.
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