Hong Kong share prices are unlikely to shake off the selling pressure that plunged the market by as much as 6.0 percent on Friday as fears over a US credit crisis linger into next week, dealers said.
They said investors were uncertain how the market will fare in the coming week, despite a late rebound. Some believed falls may not have reached the bottom and the market should brace for more volatility.
Castor Pang, strategist at Sun Hung Kai Financial Group, said the market has dropped to an "irrational" and "unreasonable" level and he warned the worst may not be over yet after the benchmark shed 1.4 percent Friday. "The market hasn't stabilised yet and I think the volatility will stay. People are scaring each other and we are seeing a domino effect. This is not normal," he said.
Hong Kong has seen panic-selling across the board on Friday amid uncertainty over global markets in the aftermath of US mortgage sector problems, with investors ignoring strong corporate results announced by local firms.
An acceleration in unwinding of carry trades, following a spike in the value of the Japanese currency against the US dollar, also contributed to the fall. For the week to August 17 the Hang Seng Index slumped 1,405.58 points or 6.45 percent to 20,387.13. The index has dropped a whopping 3,085.75 points from its record closing level of 23,472.88 nearly a month ago on July 24.