Hong Kong share prices are likely to trade lower in the coming week as they undergo a correction following more than four percent gains this week, dealers said Friday.
The Hang Seng Index jumped to a five-and-a-half year high Thursday and witnessed the heaviest turnover of 45.97 billion Hong Kong dollars (5.9 billion US) since the height of the Asian financial crisis in 1998.
There have been strong fund inflows into the territory as fresh hopes that the Chinese yuan will be allowed to appreciate further resurfaced ahead of Chinese President Hu Jintao's US visit later this month.
Investors were also encouraged by a US Federal Reserve official suggesting that the interest-rate rise cycle there is nearing an end but the key to that view will be the US employment report due later Friday. Most expect the underlying up trend to continue unless those US figures are radically out of line with expectations.
For the week ending April 7, the Hang Seng Index soared 666.73 points or 4.22 percent to close Friday at 16,471.77.
Dealers said the market will continue to be supported by strong fund flows although it will likely now see some profit-taking.
"I believe the market is going up too quickly. I expect to see some profit-taking," said DBS Vickers sales director Peter Lai.
Investors will closely watch key economic data due out from the US next week for clues on future interest rate movement after the US employment figures. Lai said he expects the market to trade between a support level of 15,800 points and resistance at 16,700 points.