Hong Kong shares are likely to take a breather next week following recent sharp gains to 4-year highs on the back of strong interest in property stocks and other blue chips, dealers said Friday. For the week ending July 15, the benchmark Hang Seng Index rose 540 points or 3.90 percent to 14,504.29, led mainly by property stocks on increasing investor optimism about the outlook for the local economy.
"I think the market will take a breather after gains seen in the past week. The index has risen 500 points and still there was no (reverse) It shows that market sentiment is very good," said Herbert Lau, chief investment officer of CASH asset management at Celestial Asia.
Ben Kwong, head of research at KGI Asia, said investors have largely digested concerns over the likelihood for more local interest rate hike.
This, coupled with their optimism about corporate results in the upcoming earning season, will continue to boost sentiment.
He also noted that there has been an inflow of foreign funds into the territory, which will provide support.
Key economic data due to be released from the US later Friday, including July's consumer sentiment, June's producer price index, was expected to confirm strong figures earlier in the week and this should be another positive.
"Even if (the market) falls, it won't fall so much. The fundamentals are good," Kwong said.
He expects property stocks to continue to do well next week and anticipates more rotational buying.
Both expect the market to trade at 14,300-14,600 points in the coming week.
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