HK shares expected to fall
(Reuters)
Updated: 2006-07-24 09:42
Hong Kong stocks are expected to fall on Monday, tracking a weak Wall Street,
with banking plays such as HSBC Holdings in focus after Beijing raised
commercial banks' reserve requirements last week.
The Hang Seng Index ended down 0.05 percent at 16,464.18 on Friday but was
still up 2 percent for the week.
"Investors may worry that China's economy is overheating, and they fear
further measures and the effect they will have on economic growth," said Conita
Hung, head of equity markets at Delta Asia Financial Group.
Hung sees the Hang Seng trading in a 100-point range below the 16,400 level
on Monday.
China raised commercial banks' reserve requirements on
Friday for the second time in five weeks in a bid to cool a racing economy that
grew 11.3 percent in the second quarter from a year earlier.
Analysts see a flat market as investors take to the sidelines before the
earnings reporting season heats up from mid-August, with trading also expected
to be quiet ahead of a U.S. GDP report at the end of the week.
Hong Kong is sensitive to the U.S. economy, since the city's currency is
pegged to the greenback.
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