bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

helpersCheckIsPostiesArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

moreOnThisArticles

urlAlias

commentCount

authorLocations

authors

paywallTypes

corrections

sponsorType

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

socialHeadline

headline

flag

firstTopic

glossary

flattenTypeIds

publishedDate

additionalInfoBoxes

images

image

relatedLinks

relatedNewsletters

__typename

createdDate

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

Cathy Holcombe

Hong Kong shares could enjoy a boost in trading today after Friday's jump on Wall Street, but brokers do not expect an extended rally.

 Softer property prices, the possibility of another interest rate rise next month and continuing Beijing-Taipei tension would cap gains, they said.

 Last week the Hang Seng Index shed 1.53 per cent to 13,178.31 points despite figures showing the economy recorded growth in the second quarter, as interest rate concerns ruled the day.

 'Interest rates will maybe go up another 25 basis points in October . . . with this kind of news hanging around, it's hard to break through 14,000,' said Celestial Asia Securities head of research Josephine Hui Suet-ming.

 She expects the Hang Seng Index to trade between the 12,800 and 13,600-point levels until the interest rate front is clearer.

 The Dow Jones Industrial Average jumped 2.16 per cent on Friday after data showed the United States added fewer new jobs than expected last month, which relieves the pressure from wage-induced inflation.

 Hong Kong, however, could need greater reassurance over interest rates in light of the lacklustre residential property market.

 Property transactions slowed by about 20 per cent last month from July - recording the lowest monthly volume since September last year.

 Falling demand can force developers to slash prices to unload inventory.

 Evidence of this was seen last week as Cheung Kong offered below-market prices for unsold units at the once-hot Laguna Verde development.

 'The property sector is looking a bit soft,' said Dao Heng Securities head of research Raymond Chong.

 In light of a possible increase in the prime lending rate next month - if the US raises rates on October 5 - Mr Chong said the short-term market outlook 'doesn't look too bright'.

 He believes property stocks will remain stagnant until the market sees further evidence that unemployment is falling, as indicated in the previous Hong Kong jobs report.

 Another set of figures is due later this month.

 On Thursday the White House announced that US-Sino talks would resume on Beijing's entry to the World Trade Organisation.

 While the news failed to ignite mainland-related shares in Friday's trade, the market will be eagerly awaiting more details on the subject.

 'There could be more positive news on WTO, the market will be awaiting this,' Ms Hui said.

  An earnings report from key red chip Beijing Enterprises (Stock Split, Page 12) due today could also offer the sector some direction after the index dropped 3.87 per cent last week.



Softer property prices, interest rates and Taiwan tension cloud horizon