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Dow effect to be short-lived

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Hong Kong stocks should open lower this week in the wake of Friday's 1.6 per cent fall on Wall Street.

The correction should be short-lived, however, with the Hang Seng Index expected to regain upward momentum by the end of the week.

Dharmala Securities research director Ben Kwong said: 'Sentiment is still quite strong, even though technically the market is still over-bought. I expect rotational buying will continue.' Banks and H shares should continue to attract attention, while some analysts are betting on property developers making a comeback.

Red chips are picked to remain quiet as investors try to gage Beijing's attitude towards further asset injections.

Last week, the Hang Seng Index jumped 2.27 per cent to 15,570.4. Average turnover rose to $21.08 billion, compared with $17.5 billion the previous week.

On Wall Street, stocks fell on Friday as Microsoft warned it could see slower revenue growth.

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