LAST week's 203-point rise on the Hang Seng Index fizzled out late on Friday, and brokers say investor sentiment will continue to be mixed when trading resumes tomorrow.
Results of meetings held in London by the British Government and Governor Chris Patten over Hongkong's political future were sparse, and investors were uncertain how to react to what little was achieved.
However, brokers said it was something of a relief that London failed to come out with a harder policy on Hongkong's future. There was no deadline set for an agreement to be reached between London and Beijing over political reform in the territory.
This week the market is likely to see less decisive direction. ''July tends to see the market down in general. Holiday time for many institutional investors is coming up and there is usually a slowdown in the summer prior to results in September,'' said Howard Gorges, managing director of South China Brokerage.
Mr Gorges said the concentration of turnover of second-and third-line stocks is likely to continue.
''In the absence of strong direction of blue chips, which are in consolidation, investors have turned their attention to second-and third-liners which they think may be in line for a change in ownership,'' he said, adding that some of these plays were speculative, while others may turn out to be genuine mainland or local takeover targets.