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SCMP Reporter

Badly bruised Hong Kong stocks may claw back some of their losses this week, helped by a respite in Wall Street's drawn-out bloodletting.

'We should have quite a good day [today] but it is likely to be day to day as we watch Wall Street,' said Howard Gorges, vice-chairman of South China Online. Buying 'will be across the board [today]. Everything got pretty oversold'.

Hong Kong blue chips were the worst performers in the region last week, dropping 6.94 per cent to 12,583.36 points as investors took their cue from plunging United States markets.

Worries that earnings of technology companies would not hold up in the rapidly slowing US economy spread into old economy counters, driving markets lower globally.

However, New York firmed on Friday, with the Dow Jones Industrial Average rising 1.22 per cent and the technology-rich Nasdaq Composite Index gaining 1.63 per cent.

That followed Thursday's remarkable turnaround which pulled the Dow back to safety after it flirted with bear market territory of a 20 per cent decline from its peak.

The volume in New York on Thursday was the third heaviest, with some speculation that it signalled the forming of a bottom.

'It is still the case of the US markets calling the shots,' said Raymond Tsui Yick-ki, head of institutional sales at Dao Heng Securities.

'I think there is some very good value out there among the [Hong Kong] blue chips.'

Hutchison looked particularly cheap at its Friday close of HK$81.50 against an estimated net asset value of about $93, he said.

Among big names reporting last year's earnings this week are Li & Fung and Wharf today, Pacific Century CyberWorks on Wednesday and Cosco Pacific on Thursday.

They were not as important as those released last week, said Louis Wong Wai-kit, head of research at Phillip Securities.

'After the results announcement of the heavyweights like the Cheung Kong camp and Henderson Land, I think there will be some sort of vacuum . . . which is why I think [Hong Kong] will be dictated by the US market for the coming week,' he said.

Gains in Hong Kong should be helped by the expiry of March index futures on Thursday, with short sellers expected to cash in their gains, said Kenny Tang Sing-hing, Tung Tai Securities' associate director.

'I think there should be a technical rebound in the coming week,' he said.

Substantial gains might draw renewed short selling, capping the Hang Seng Index's gains at 13,000 points, Mr Tang said.

H shares could be a focus this week as investors sought to escape the punishing volatility which has plagued interest-rate sensitive stocks.

Toll-road builders looked a safe defensive bet, Mr Tang said.

Index heavyweight China Mobile plunged 13.5 per cent to $33.30 last week while rival mainland mobile operator China Unicom fell 11.5 per cent to $8.85.

They were a speculative buy now, said Kennis Leung, a director at Tanrich Asset Management.



Wall Street dictates trend as blue chips mark week as worst performers