STOCKS have fallen more than 300 points, or 3.1 per cent, on the Hang Seng Index over the past five trading days, signalling deep uncertainty among investors. In spite of this, brokers remain confident the index will finish the year above 10,000. In a straw poll of 10 brokerages, three predicted the index would finish the year at 11,000, four favoured 10,500, two said 10,000 and one 9,200. The index's highest close this year is 9,939.95 last Wednesday, up 1,748.91 points since January 1. It has headed downhill since due to declines on Wall Street, where technology stocks are being sold heavily, and an absence of foreign funds flowing into the region. The retreat has increased the caution of tipsters and pared back predictions for the index. A few months ago some brokerages were predicting that the index would break through the 13,000 mark at the end of the year. Brokers said the outlook had worsened recently, mainly on account of a lack of positive sentiment about further cuts in interest rates. The index was still the best performer in the Pacific region over the year. A major determinant to the level of the index at the New Year will be whether or not the US Federal Reserve Open Market Committee cuts interest rates again when it meets in next month. Kleinwort Benson Securities head of sales, Nial Gooding, said he was confident the index would reach 11,000 by the end of the year as long as there was an interest rate cut. 'We are entirely a derivative on world events. If the interest rate cut doesn't come, I don't think we will cross 10,000,' he said. He said the same factors hurting Wall Street were actually helpful to Hong Kong in the long term. 'The US economy is not exactly on fire and this will create a greater likelihood of an interest rate cut,' he said. OCBC research director Martin Ching said his firm maintained its forecast of 11,000 by the end of the year despite interest rate uncertainty. He said factors such as expected looser credit controls in China next year would boost market sentiment. 'Even if the index hit 11,000, it is not expensive,' he said. Crosby Securities deputy managing director Archie Hart said his firm was looking at a year-end mark of 10,500. He said the 10,000 mark was presenting a major barrier. 'We are in a trading range between 9,000 and 10,000 and we are going to need to gather a lot of momentum to get through 10,000,' he said. 'At the moment I don't know exactly what is going to give us that momentum.' Standard Chartered Securities research director Edward Chan said his firm was looking at a level of 10,200 to 10,500. He said there were a number of positive factors that would see the index clear 10,000 and reach as high as 12,200 in six months. These included improving relations between the US and China, increasing demand in the property market and the likelihood of further interest rate cuts. 'It looks positive as a whole but the main thing is whether the confidence will translate these factors into concrete results,' he said. China Everbright Securities research director Samuel Lau Kwok-leung said the index should have no problem breaking through the 10,000 level but the problem was whether or not it could sustain this level. He said he doubted if the overseas funds, which led the recent surge, would stay in the region for the long term. 'The rally this time is very different from that in 1993. The current turnover does not indicate a strong fund flow,' he said. Patrick Chia, an analyst with Cheerful Securities, took an even more bearish view. 'In the long term, the house view is the index will go back to challenge 10,000 but I am not so sure,' he said. He said poor fundamentals, including a weakness in the property sector, would keep the index pegged back. He doubted there would be an interest rate cut before the end of the year. 'My personal view is the year-end target will be around 9,200,' he said.