Hong Kong shares outlook: Mixed to higher on technical rebound/range trading
2001-03-31
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Share prices are expected to open mixed to higher on
a mild technical rebound after recent losses, with market sentiment remaining
cautious following the hesitant performance on Wall Street overnight, dealers
said.
Range-bound trading is expected overall, while H-shares and red chips will
continue to outperform on investor optimism about the earnings outlook of these
state-owned enterprises, they said.
Telecom and tech stocks will remain under, tracking the performance of
their U.S. counterparts on NASDAQ overnight, while PCCW in particular may see
further downside after its 2000 results, they added.
The Hang Seng index yesterday closed down 173.52 points or 1.35 pct at 12,
677.89, off an early low of 12,523.61 and a high of 12,768.67, on turnover of
7.88 bln hkd.
The Hang Seng March contract last traded at 12,645 points.
The Hang Seng London Reference Index was up 12.5 points at 12,690.39.
The overnight rate opened at 5.375 pct, up from 5.25 pct at yesterday's
close, while 3-month HIBOR was unchanged at 4.9375 pct.
The base rate remains at 6.50 pct.
Ben Kwong, associate director with KGI Securities, said he expects the Hang
Seng Index to trade 12,500-12,800 points today.
"The HSI will open higher on a technical rebound after experiencing heavy
selling for most of the week, he said.
H shares and red chips will again fare better than the general market as
the stocks are now seen as relative safe havens against the volatility being
experienced elsewhere.
Selected property stocks may also find some support after recent heavy
losses but overall the upside may be capped by PCCW, which is likely to
continue under pressure following its 2000 results, Kwong said.
"It is possible that the stock will again test its immediate support level
of 3.00 hkd today amid the poor sentiment on the company's earnings prospects,"
he said.
st/bmm
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