AFTER the index jumped 227.95 points, 3.17 per cent, and set three new highs last week, brokers are divided about its likely direction this week. Some brokers believe all the good news about the Chek Lap Kok airport project, Sino-British political discussions and China's Most Favoured Nation trading status with the United States was already discounted by the market, and saw little to improve sentiment. Others contend that the weekend's fourth round of Sino-British talks in Beijing and the Joint Liaison Group's airport talks this Friday will help sustain the market's recent strength. Seapower Securities research director Samuel Lau Kwok-leung said the split had become more distinct because foreign institutions had remained heavy buyers while Hongkong fund managers had adopted a cautious approach. ''It's a tug of war,'' he said. ''I think the market will be very volatile . . . with the trading range around 7,300 to 7,500.'' Crosby Securities' Julian Wood is one of the optimists. He described Friday's 49.33-point dip as the market briefly running out of steam rather than the start of a correction. Despite the market's inability to remain above 7,500 on Friday, Mr Wood said it could move into record territory again this week. ''It will be a week punctuated by a few interesting swings one way or the other,'' he said. ''I still think it will have plenty of support barring a nasty accident.'' Mr Wood's optimism was not share by Lehman Brothers head of research Kirk Sweeney, who expects a correction. He said Lehman Brothers would continue to stick by its recently revised 12-month target of 7,500. ''Until the 1994 earnings are a little more visible - and we won't see that until September - I'm still confident with it,'' he said. Mr Sweeney said the index would probably trade within a 200-point band over the next few months unless there was a definite political agreement between China and Britain and the airport financing issue was resolved. DBS Securities director Eugene Law believed the market would consolidate this week. He said he would be surprised to see the index fall below 7,200. South China Brokerage director Howard Gorges said the market could pick up later in the week as investors focused on the airport talks and made selective purchases of airport plays. Mr Gorges said there might be interest in Mingly Corp because of its large land bank on Lantau, and Hongkong Aircraft, which would move to a larger facility at Chek Lap Kok and be able to handle more repair and maintenance work. Last week's best-performing stock was Winsor, which climbed 10.4 per cent to $13.70. Hutchison Whampoa, which was heavily traded throughout the week, also enjoyed a good week with a 7.21 per cent rise to $22.30, while Miramar was up 7.5 per cent to $12.90. The worst performing stock was Dairy Farm International, which fell 1.59 per cent to $12.40. Lai Sun International was down 0.8 per cent to $3.10 while Mandarin Oriental lost 0.58 per cent to $8.50.
