Hong Kong share prices will continue to fluctuate but there are signs that the market may have hit the bottom, dealers said. For the week ending November 14, the benchmark Hang Seng Index was down 4.9 percent, ending at 13,542.66, despite a rally on Friday.
Despite some positive signs, the market remains reliant on news and movements on bourses across the world, said Howard Gorges, vice chairman of South China Securities. "The market is pretty reactive at the moment," Gorges told AFP.
"Given the volatility that we have experienced for weeks, I think people are wary. They do not want to chase the market."
Gorges pointed out that turnover remained low and that most of the activity was being driven by hedge funds, many of which have performed badly during the global economic slowdown. He added that China's stock markets seemed to be growing in confidence after a dismal 2008 so far, perhaps in response to the giant economic stimulus package the government recently announced.
"You have seen that Shanghai's turnover is starting to be a bit higher than Hong Kong, so maybe people are starting to get some confidence in China's stimulus package," he said.
Gorges said there were signs the market had moved off its bottom but he cautioned against over-optimism, as many investors were still too nervous to deal in stocks, he said.
"I would say that the writing on the wall is more favourable but that does not mean to say we are ever going to see a strong market in the near-term," he said.
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