Dealers were divided Friday on how Hong Kong share prices will perform next week, following a week of unprecedented turmoil on the local bourse and continuing global economic uncertainty.
The index recorded both its largest single-day gain and loss last week, as fears of a US recession and then a sharp cut in interest rates pulled at investor sentiment.
"The market is going to go up, up and away," said Francis Lun, general manager at Fulbright Securities. "We have turned the corner when the Federal Reserve cut interest rates by 75 points. These last few days confidence has been restored. Despite SocGen, the market stayed calm. That is what we asked for."
French bank Societe Generale (SocGen) announced Thursday a near five-billion-euro (7.15-billion-dollar) fraud-related loss due to a rogue trader.
Lun said the market remained resilient despite mainland Chinese figures that he said underplayed the inflation problem. "Everyone knows inflation is closer to 10.0 percent. Despite this, the market recovered with remarkable calm. We have weathered the situation. The market is still very cheap."
However, other dealers said investors should remain wary. "The Hong Kong market has been crazy. It tends to over-react to every piece of news out there ... people should be conservative," said Jackson Wong, investment manager at Tanrich Securities.
"Caution in the market should prevail next week," said Conita Hung, research head at Delta Asia Securities. The index ended the week down 79 points or 0.31 percent at 25,122.37, while for the year-to-date it is down 2,690 points or 9.67 percent. Friday's performance marked the index's third-biggest one-day points gain in its history.