Japanese survey on business sentiment may set index on unsteady path
Hong Kong share prices could come under renewed pressure this week as investors pore over Japan's quarterly survey on business sentiment, which is expected to confirm the poor state of Asia's largest economy.
Brokers said if the yen weakened after the widely watched survey was released today, stocks could head lower as interbank rates firmed.
'Once again the focus is likely to be on the yen and implications for Asia,' Technical Data chief economist George Worthington said. 'This will keep [the region] on an unsteady footing this week, though the markets are unlikely to be too aggressive for fear of another bout of intervention.' Last week, the Hang Seng Index gained 15.95 points to finish at 8,607.86. The modest rise pared its loss for the year to 19.72 per cent.
Daily trade over the five sessions averaged $5.56 billion, compared with $5.83 billion this quarter.
The market's small gain came in the wake of the Government's $44 billion support package to shore up an economy badly hit by the regional financial crisis, the first anniversary of which falls on Thursday.
Since the United States and Japan surprised the markets with their joint bid to rescue the yen on June 17, the US dollar has regained its bullish tone.
It rose to as high as 143 yen last Friday, about the level at which the Bank of Japan and US Treasury launched their joint action.