Hong Kong stocks will likely lower after an initial, short period of modest gains next week, dealers said. For the week ending January 2, the benchmark Hang Seng Index closed at 15,042.81, rising 858.67 points, or 6.10 percent over the week. The market was closed on January 1 for the New Year.
The market closed up 4.6 percent on the first trading day of 2009, supported by China's approval of 3G mobile licences for its telecom giants. Peter Lai, sales director at DBS Vickers, said the market would rise a little early on the back of Beijing's market-boosting measures and high hopes for US president-elect Barack Obama, who will take his office on January 20. "But I foresee that once the index climbs to around 15,800, it will start to go down again on profit taking," he told AFP.
He believed that the index would trade in the range of 14,000-15,800. "China's policies and the rally of the Dow Jones were beneficial to the market sentiment. But this is unlikely to last long," he said.
"Obama is not a superman. He cannot solve the many problems in the US now." He warned investors against being over-optimistic about the strong rise at the beginning of the year, as it would only set the stage for sharp falls later on. "The fall this time will be even steeper than last year. Nobody knows where the bottom will be," he said.
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