Hong Kong share prices are likely to be largely driven by news of the US economy in the coming week, dealers said. For the week to May 23, the Hang Seng Index closed at 24,714.07, down 904.79 points or 3.53 percent. Jackson Wong, investment manager at Tanrich Securities, said investors were cautious about the overall economic environment.
"They are worried about recession in the US and higher inflation that may result in stagflation," she said. A recession in the US could slow the global economy because Americans are the biggest consumers of electronic goods, cars, food and clothes that are shipped from Asia and Europe, he added. The Federal Reserve Wednesday cut its 2008 growth outlook for the US economy and raised its inflation forecast for the year. Peter Lai, sales director at DBS Vickers, said the Hong Kong market's movement would be driven by day-to-day news.
"It's hard to predict the market's performance as investors do not have clear direction," he said. The situation might not become clear "until the end of the second quarter when the US gives a clearer picture on its economy and (interest) rate cycle."
"There are quite a number of economic indicators that traders can look out for, including new home sales, durable good sales, and consumer performance in the US," he said. Lai said the case of telecom giant China Mobile showed how the market had lately become heavily sentiment- and news-driven. China Mobile fell more than 3.8 percent at the close of Friday's trading, following rumours that China would take the first step in a long-awaited restructuring of the telecom sector, he said.
Comments
Comments are closed.