HK stocks seen tumbling on Greenspan comments
HONG KONG, Oct 15 (Reuters) - Hong Kong stocks are expected to fall on Friday after
remarks by Federal Reserve Chairman Alan Greenspan triggered concerns about a
correction in U.S. stocks and a surge in U.S. long bond yields.
While emphasizing he was not predicting a stocks crash, Greenspan told a banking-related
conference late on Thursday that sudden losses in investors' confidence ''will inevitable emerge from time to time'' and said
financial institutions should boost reserves to take account of that possibility.
''The market should open down due to Greenspan's remarks, which came after the New York market closed and has pushed
the S&P futures down,'' said Alex Wong, research manager at OSK Asia Securities.
A surge in long bond yields overnight also rekindled fears about a possible interest rate rise, he added.
December S&P 500 stock futures were down 10 points at 1,280 at 0124 GMT after hitting a low of 1,271.30 earlier.
The 30-year U.S. Treasury bond was off on Thursday, yielding 6.32 percent, the highest level since October 1997.
Wong said the Hang Seng Index (^HSI - news) could fall to 12,300 points with a strong support at 12,200, Wong said.
The blue chip index closed up 10.95 points or 0.09 percent at 12,486.82 on Thursday.
The blue chip index closed up 10.95 points or 0.09 percent at 12,486.82 on Thursday.
The market was under pressure due to interest rate fears and massive fund-raising exercises in the pipeline, said Charles
Cheung, executive director at J&A Securities (Hong Kong) Ltd.
China offshore oil group CNOOC Ltd said it had postponed its initial public offering, scheduled to close on Friday, because of
adverse market conditions.
The company had cut the issue price and size of its American Depositary Shares (ADSs) due to recent declines in oil prices,
global co-ordinator Salomon Smith Barney said on Thursday.
''The market has largely discounted the news since the initial response to the deal was not very encouraging anyway,'' Cheung
said.
However, short-covering ahead of the long weekend could help lift the market later in the day, he added.
The Hong Kong market will be closed on Monday for the Chung Yeung Festival.
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