Without new impetus the index is set to continue flip-flopping around 9,100 to 9,350. A new challenge on 9,500 is unlikely. There is firm support at about 9,240, with strong profit-taking at 9,540.

The Hang Seng Index closed at 9,313.95 on Friday, up 51.95 points on the day and up 46 points on the week. The relatively light volume of last week meant the index could skate around, with 50-point or 60-point moves achieved with ease.

On Monday, the index fell 146 points, it lost another 18 points on Tuesday, bounced back on Wednesday with a gain of 261 points only to slide again on Thursday to lose 102 points.

The big close on Wall Street on Friday looks good, but first glances can be deceptive. The Dow Jones Industrial Average was up 14.52 points to 4,510.79, above 4,500 for the first time at the close and its third straight record-high.

However, analysts' comment suggested the market was due for profit-taking because comments from Federal Reserve spokesmen on Thursday and Friday seemed to indicate a rate cut was not likely soon.

The close on Friday made the Hang Seng Index the seventh best-performing major international equity index out of 50 on the year to Friday, as followed by Bloomberg, with a return of 13.79 per cent, against 17.64 per cent on the Dow, in third place.

Among Hang Seng Index constituents for the period there is a fairly mixed bag of returns, indicating stock picking was probably more important this year than it has been in previous years.

In all, the Hang Seng has been led by the property index, with Sun Hung Kai Properties up 25 per cent and five other stocks in the sector giving double-digit percentage change returns.

As already mentioned, the recovery in the property market appears to be fully discounted in prices, leading some analysts to suggest the index is topping out and that it may be time to unload in a profit-taking spree.

Utilities have had a good run, with Hongkong Telecom up 17 per cent, Hong Kong China Gas up 19 per cent, China Light and Power up 24 per cent and Hongkong Electric up 30 per cent. Again those appear to be fully valued.

Financials are mixed, with HSBC up 20 per cent, Hang Seng Bank up five per cent and Bank of East Asia down nine per cent on poor domestic banking fundamentals.

The conglomerates and industrials are mixed, with goods having exposure to the office market being hurt by expectations of a big downturn in that sector over the next 18 months.

Swire is the exception to this, and is up 23 per cent. Some media stocks have been under pressure because of rising operational costs.

The remainder appear to suffer from poor fundamentals in their sector or appear fully valued.

On the diary this week, economists will be keen to see what is in store from May consumer price index figures due on Thursday.

In the US, on Wednesday a report on April's trade deficit is due. In March the deficit was US$9.1 billion.

The Beige Book of economic conditions in the US is due from the Fed the same day.

On Friday durable goods orders are out for May. The Bloomberg forecast is for a rise of 0.7 per cent against a drop in April of four per cent.

It was the four per cent drop report last month for April that inspired the most recent surge on Wall Street when expectations of an interest rate cut soon rose.