The Hong Kong stock market will be less susceptible to changes in United States interest rates next year as technology stocks will dominate the Hang Seng Index, according to Jardine Fleming. Technology stocks - which are driven more by global valuations and are less sensitive to changes in Hong Kong and US interest rates - are expected to become the biggest sector in the index next year. 'With the shrinkage of property we can worry a little bit less about US interest rates,' Jardine Fleming Hong Kong strategist Steven Li said. New listings anticipated for next year such as telecommunications giant China Unicom are expected to be included in the index almost immediately because of the size of the firm. The brokerage still expects Hong Kong interest rates to rise next year following at least some of the anticipated increases in US rates. The effects of interest rate increases have diminished in the real economy with the recovery being driven by intra-regional trade which is less dependent on US rates. Jardine Fleming regional economist Daryl Ho Hon-kit said: 'The biggest driver in the recovery is intra-regional trade . . . and that has little to do with the interest rate cycle at this stage.' Strategists agree the effects of US interest rates on Hong Kong are likely to diminish over the next year. HSBC Securities regional strategist Abhijit Chakrabortti said: 'There is a rerating happening in the market because the composition of the market is changing away from being purely driven by rate-sensitive sectors such as banks and property towards areas like telecommunications and technology.' The effect on the economy of a change in US monetary policy has also eased because of strong liquidity in Hong Kong, which has led to the connection between domestic and US interest rates becoming less strong. 'The liquidity improvement in Hong Kong has been fantastic due to the fact that we are running a surplus on our goods and services balance . . . and there are big capital inflows mainly into the equity market,' Mr Chakrabortti said. Jardine Fleming expects the Hong Kong stock market to close at 20,500 points at the end of next year on the back of growth in earnings per share of 18 per cent. It will also be boosted by the mainland's cycle of economic growth bottoming out and possible joint ventures between foreign and mainland companies in the aftermath of Beijing's World Trade Organisation entry. Telecommunications stocks are expected to rise further, with Hong Kong seen as a strong market for US firms to conduct mergers and acquisitions. The introduction of more data services to mobile telephones will also spur growth in the region's telecommunications stocks and as telecommunications firms move into other sectors. Jardine Fleming's target price for Cable & Wireless HKT is $25, a 13.63 per cent premium on yesterday's close of $22. Jardine Fleming analyst Jake Lynch said: 'The eventual listing of the Star TV joint venture will be the main trigger to drive the stock up to that price.'