Hong Kong share prices will likely fall on profit-taking as investors fear the outbreak of the swine flu will dampen the domestic economy. For the week ending April 30, the Hang Seng Index rose 1.7 percent to close at 15,520.99.
Hong Kong's market was closed Friday for a public holiday. Francis Lun, general manager at Fulbright Securities, said he expected Hong Kong's index to fall next week after it gained 966 points since Wednesday. "There are fears that the swine flu could do more damage during the long holiday," Lun said. "Profit-taking is likely next week as swine flu will weigh on investor sentiment."
Peter Lai, DBS sales director, told AFP that many Hong Kong investors had been over-optimistic about a recent rally on Wall Street. Lai said the ailing car manufacturing industry in the US was the clearest sign that the country's economy had not yet hit bottom. The White House announced Thursday that auto giant Chrysler was to file for bankruptcy protection following a collapse of negotiations with its debt holders.
However, Ernie Hon, a strategist at ICEA Securities, said he expected bullish sentiment in the US would continue to support the local market. "We expect the recent correction of the local market has ended and the HSI will retest the level of 16,000," Hon told Dow Jones Newswires.