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SCMP Reporter

The bull just might take a break at the start of the New Year after keeping up a strong run throughout most of the second half.
The Hang Seng Index is expected to shed as much as 2 per cent today, given a weak last day of trading in the United States and fatigue from the local year-end rally, market participants said.
The Dow Jones Industrial  Average dropped 101 points, or 0.76 per cent, on New Year's Eve to end the year at 13,264.82
'Generally speaking, the first day of trading is usually a bull result,' said Simon Lam Ka-hang, the research director at Christfund Securities. 'But the HSI  rose over 400 points on  the last trading day of 2007, so we may see consolidation ... something like 1 to 2 per cent but nothing over 300 points.'
Ben Kwong Man-bun, the chief operating officer of KGI Asia, also forecast the blue-chip index  would finish today at about that level.
Such a drop would take the index to 27,512 from the year-end close of 27,812.65.
Felix Man Kam-fai, director of Hantec Futures, said he expected an even steeper fall to 27,300.
Property tycoon Lee Shau-kee, better known nowadays as the 'Midas of stocks',  had said that the HSI would break 30,000 in spring before advancing further to 33,000 by autumn.
On New Year's Eve, however,  Mr Lee tempered his bullish forecast, saying that the stock market would remain flat in the summer on Beijing's macro controls and the US subprime fallout.
Over the past five years, the HSI has risen an average 118.43 points on the first day of the year for an average gain of 1.05 per cent.
During the same period, the H-share index  has risen an average 39.68 points on the first day for an average gain of 1.2 per cent.
Mr Kwong expects the HSI to move between 27,000  and 28,500 after  the New Year holiday.
Mr Man said he expects the HSI to 'test a downside of around 27,000, before gradually picking up again after  Lunar New Year', unless some positive news emerges.
Mr Lam said the most optimistic reading of the market would see the HSI hit 29,500 by the end of the month.
'The trend is favouring the upside on possible Fed easing and with the economic indicators showing weaker inflation, but this is assuming the price of oil doesn't go over US$105 a barrel,' he said.
The price of oil climbed US$35 a barrel last year while oil futures contracts in New York hit a record high of US$99.29 on November 21.
The HSI  closed the year up 39.31 per cent, its best performance since 1999 as investors bet on the continuing growth of the mainland economy and the expectation that more mainland funds would flow into the city.
The H-share index ended the year up an even better 55.93 per cent.
Mainland markets put up the best performance with the Shenzhen Composite Index soaring 163 per cent while the larger Shanghai Composite Index jumped  97 per cent.



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