Hong Kong stocks are likely to be caught in a tug-of-war this week between negative news including poor economic data from the United States and bearish A-share sentiment, and positive news such as possible US interest rate cuts, analysts said.
Those who believed the negative news would outweigh the positive warned the Hong Kong stock market's key index could drop as much as 500 points, to 23,500 during the week. Additional negative factors, they said, included more mainland government macroeconomic measures and the sixth anniversary of the September 11 terrorist attack tomorrow.
Some analysts, however, believed that Hong Kong blue chips could become a shelter for investors before a possible sell-off in the US.
The Hang Seng Index was unchanged last week after closing down 67.79 points or 0.28 per cent on Friday to end at 23,982.61, while mainboard turnover was heavy at HK$109.1 billion, up from Thursday's HK$79.4 billion.
On Wall Street, shares took a dive on Friday as news of a surprise drop in US payrolls, the first in four years, heightened fears that growth in the world's biggest economy is flagging. The Dow Jones Industrial Average tumbled 249.97 points or 1.83 per cent to close at 13,113.38.
