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Fears over increase in rates to keep bulls at bay

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THE stock market is expected to open stronger today on the first trading day of the year.

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However, trading is not expected to be intense as investors are still anxious over a possible further increase in interest rates.

Bearish sentiment is still in the air and the market is forecast to remain stuck around the 8,000-point level on the Hang Seng Index as long as rising interest rates remain a concern.

Brokers said trading would continue to be quiet in the first half and would bottom out at the 7,000 to 7,200 level.

The rise in United States interest rates has dampened global equity markets.

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'As shown by the robust economic indicators in the US, it is fairly reasonable to expect a further interest rate rise in the next two quarters,' a Seapower Research report said.

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