Hong Kong share prices are likely to trade flat next week because of the fall of the China market and a lack of buying support, dealers said. For the week to June 6, the Hang Seng Index closed at 24,402.18, down 130.94 points or 0.53 percent on the previous week.
Francis Lun, analyst at Fulbright Securities, said the outlook next week was negative. "The trading volume is exceptionally low this week, reflecting the fall of the China market and a severe lack of buying support," he told AFP.
Lun advised investors to look out for the movement of the China market, which has been having a strong impact on Hong Kong market since last month.
"But there are not many economic indicators investors can look out for because it will all be about politics. The market in the coming weeks will be heavily reliant on Beijing's policies," he said. However, Lun said it was possible for the downside to be offset by a strong performance of oil stocks. At Friday's closing, CNOOC jumped 3.10 percent and PetroChina advanced 1.30 percent because of surging oil prices.
But he said the most surprising closing rise on Friday was that of oil refiner Sinopec, at 2.90 percent to 8.25 dollars, after a long fall earlier in the day. The jump followed a state media report on Friday that it would raise liquefied petroleum gas prices to help offset rising crude oil costs. He said there were also rumours that Beijing would allow power generators to increase its electricity tariffs and that windfall tax would be adjusted upward. The rumours would likely boost confidence in the market, he said.
Y.K. Chan, a fund manager at Phillip Asset Management, told Dow Jones Newswires that he expected the index to trade in a narrow range between 24,000 and 25,000 next week. "I can't see any near-term catalysts to attract investors to buy stocks," Chan said.
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