Property and banking stocks are likely to lead the Hang Seng Index higher this week, as the improving interest rate scenario and strong property sales improve sentiment. Brokers said strength in the two sectors could see the Hang Seng Index challenge the year high of 11,600, set in February. Attention will be focused on the continuing property results season, with a number of the property stocks reporting late in the week. Tomorrow will see the debut of casual-wear retailer Glorious Sun Enterprises. Last week, the Hang Seng Index closed up 343.45 points, or 3.11 per cent, at 11,369.04. Average daily turnover rose to $4.27 billion from the previous week's $3.54 billion. Seapower Securities senior marketing manager Samuel Ho said: 'Sentiment has improved. People are saying that interest rates will not be raised, but there could be a lack of fresh capital.' Banking and property stocks have led the recent rally, as they have benefited most from the improved sentiment towards interest rates. Brokers said the property sector was likely to receive further interest, due to strong buyer response to Swire Pacific's Island Place development in North Point, and to New World Development's Discovery Park in Tsuen Wan. They will also gain from hopes of high earnings growth, after last week's solid earnings performances by Henderson Land Development. A salesman at a European Brokerage said: 'Henderson's results have improved confidence that the residential property is seeing an increase in demand.' Henderson Land closed at an historic closing high of $63.50 on Friday, after rising as high as $64 during the day's trading. Brokers said New World Development and Sun Hung Kai Properties could be at the forefront of the next wave of the rally. HSBC is thought likely to remain in favour after the stock rose to a record high of $138 on Friday. Friday sees a number of the smaller blue-chip property companies announce their earnings. Amoy Properties and Hang Lung Development post finals, and Hysan Development posts interims. Interest this week could also focus on retail stocks. Glorious Sun Enterprises is expected to surge when it makes its debut, as the public offering of its 250 million-share issue was 236.6 oversubscribed according to the company last Wednesday. If the debut lives up to expectations that could have positive impact on other retailing stocks such as Giordano International, Goldlion and First Sign International.