Last week's surge in Hong Kong stocks is expected to continue for the next few days, but the market could face selling pressure around the 13,000-point level. The Hang Seng Index ended 4.41 per cent higher at 12,490.3 points on Friday, breaking the 12,000-point barrier for the first time in 17 months. Turnover soared to $11.47 billion on Friday, the highest since November last year, with overseas fund managers re-entering the Hong Kong market as part of a drive to increase exposure to Asian stocks. Brokers felt the surge would continue into the start of this week with the prospect of a successful land auction tomorrow, the first since the government suspension was announced in June last year. 'It should be excellent so the property counters might respond and move higher,' Core Pacific-Yamaichi International research director Alex Tang Yee-yuk said. Cheung Kong, New World Development and Hang Lung Development have shown interest in bidding at the auction when three residential sites - a 26,845 square foot plot at Cloud View Road, North Point; a 45,984 sq ft site at Broadcast Drive, Kowloon Tong; and a 208,822 sq ft site in Tuen Mun - go under the hammer. Selling pressure is expected to kick in after the auction as investors grasp the opportunity to take profits. 'The market should find strong resistance at the 13,000 level,' Mr Tang said. A stronger market earlier in the week is likely to increase rumours of blue-chip companies trying to tap the equity market for more funds. Asia Financial Securities research head Annio Kwong said: 'Last week we heard a lot of rumours for the blue chips to tap additional funding . . . but this week after the land auction I think blue chips are likely to tap more money from the market.' Brokers are uncertain how much longer the market's fixation with Internet-related stocks will continue, but they expect these firms to lose some of their recent gains. On Friday, Hongkong Telecom rose 8.47 per cent to $18.55 on the prospect of its Interactive Media Services being spun off on the United States' Nasdaq market. Hanny soared 48.24 per cent to $1.69 after it revealed it was also considering a Nasdaq listing. Internet stocks have reached much higher valuation levels in the US than Hong Kong, but brokers said the two markets should be treated differently. Mr Kwong said: 'Some investors use the same criteria to pick the technology counters compared with the US counters. This is nonsense.'
