Hong Kong stocks should open the week on a positive note following gains on Wall Street on Friday. The Dow Jones Industrial Average jumped 1.36 per cent on Friday to close the week at 7,071.2 points. More importantly, yields on US 30-year government bonds fell to 6.87 per cent, from 7.14 per cent a week earlier. The good news in the financial markets comes as US inflation remains under wraps despite the strongest economic growth in a decade. Last week, the Hang Seng Index rallied 3.45 per cent to 13,081.7 points in line with Wall Street and improved sentiment towards the Hong Kong property sector. The US markets would again set the pace this week, analysts said. In a possible indicator that Hong Kong will continue to advance, the Hang Seng London Reference Index rose 1.39 per cent to 13,263.66 points on Friday after the release of US employment figures and news that the White House and Congress had agreed on a plan to balance the budget deficit. DBS Securities research director Percy Au-young said sentiment in Hong Kong had made a strong recovery. However, the index would only break out of its 12,700-13,300 range with the help of continuing good news from the US. Property stocks should remain on the upside after figures released last week showed property sales last month reached $106 billion, their highest level ever. Salomon Brothers analyst Michael Green said investors should be switching into property stocks with exposure to the office market. 'Companies with exposure to the office market offer extraordinary good value. Even though we recommend most property stocks, more of the good news is already factored into the residential market,' he said. Mr Au-young sees red chips continuing to outperform the market amid growing expectations of falling interest rates in China. China-related stocks that have seen a sharp run-up in recent weeks could see some profit-taking as the first of a number of China-related initial public offerings hits the market. Property developer Beijing North Star will offer $1.48 billion of H shares from tomorrow. Later in the month, Zhenjiang Expressway will offer $3.45 billion of H shares. Mr Au-young also likes medium-sized banks, saying their growth rate is faster than bigger Hong Kong banking institutions while their valuations remain at a discount. After closing at a record high of $197.50 on Friday, HSBC, the parent of Hongkong Bank, is expected to remain bullish this week. The stock could see resistance as it approached the $200 level, analysts said. On Thursday, Hong Kong Telecommunications will release results for the year to March 31. Analysts are anticipating profits to rise about 12 per cent to $11.14 billion, according to The Estimate Directory.