With stocks in the United States seemingly entering a period of correction, the time may be right for the Hong Kong market to plough its own furrow, strategists say.
The Hang Seng Index and the Dow Jones Industrial Average have tracked each other closely in recent years because of the territory's currency peg and the consequent correlation between interest rates.
Monday's sharp fall by US stocks, however, was due to declining earnings by US companies, rather than the interest rate fears that have dogged the Hong Kong market of late.
If such a scenario persisted, Hong Kong stocks should move higher on a positive outlook for domestic earnings and faster economic growth in China, strategists said.
'If corporate earnings, not interest rates, are the reason for the Dow's fall, it should be the basis for decoupling,' Peter Perkins, strategist at Daiwa Securities (HK), said.
Meanwhile, weaker US stock prices could, by themselves, be a boon for Hong Kong counters as US investors seek profits in Asia's faster growing economies.
'This could be good news for Hong Kong, but don't celebrate yet,' Carlton Poon, of Worldsec International, said.
