Index to keep downward course as weak Japanese currency causes jitters
Hong Kong shares are expected to struggle around their three-year lows this week as the weakness of the yen stirs further regional market unrest and unemployment figures confirm Hong Kong's economy to be firmly in the doldrums.
Brokers said that while short covering had emerged from some institutional investors late last week, it was unlikely to be sufficient to hold up the market this week.
'The consensus seems to be that the market will head lower,' one broker said.
Many hedge funds are said to be holding on to short positions taken out when the market was trading as high as 15,000 points, he said.
Open interest in June and July index futures had fallen only slightly in the past week.
'These people are sitting on phenomenal profits but most people want to stay short,' the trader said.