Hong Kong shares are expected to pick up further after an early consolidation next week as investors digest another record breaking performance and assess the latest hike in interest rates in China, dealers said Friday.
"In the short term, there should be a correction but in the long term, I'm still bullish on the market," DBS Vickers director Peter Lai said. "The market will depend on the performance of the Dow and on the announcements in mainland China," he said.
For the week to July 20, the Hang Seng Index was up 192.61 points or 0.83 percent at 23,291.90. The People's Bank of China announced after the market closed on Friday that it was raising benchmark deposit and lending rates by 27 basis points, effective Saturday, after stronger-than-expected economic figures Thursday.
The move had largely been anticipated and fell well short of the draconian measures that might have been expected if Beijing was very seriously concerned about the economy's blistering growth rate - 11.9 percent in the second quarter.
Despite the latest rate hike - the third this year - Lai does not anticipate a sharp fall next week.
"Investors may in fact view it as a positive lead and even buy more shares next week," Lai said. Howard Gorges, vice-chairman of South China Securities, also expects the stock market to trade higher in the coming week.
"The environment looks as though it's business as usual and we might as well try to push ahead next week," he said.
"Of course we've got clouds on the horizon if the oil price surges from its level or a problem emerges ... but the market has been doing pretty well lately and the green light is still on," he said.