Hong Kong stocks are expected to mark time this week after a blistering start to the new year, as investors both here and in the United States wait to hear what their respective leaders have to offer their fragile economies.
The Hang Seng Index ended the week up 138.59 points or 1.46 per cent at 9,583.85, largely helped by Friday's 2.33 per cent rally.
'The market will still be a little volatile in the first quarter and that's why I don't expect a very strong rally to continue but, since we did poorly in December, we're seeing a technical rebound,' said Celestial Securities research head Herbert Lau Chung-kwan.
Investors were likely to greet Wednesday's annual policy address by Chief Executive Tung Chee-hwa with little more than a yawn, analysts said. His speech is expected to offer little to tackle Hong Kong's myriad economic ills such as high unemployment, a burst property bubble and a gaping budget deficit.
'The market is speculating that there might be measures regarding the immigration policy to lure mainland investors into Hong Kong,' Mr Lau said. 'Other than that, the market won't be expecting too much from his policy address.'
If immigration policies were forthcoming, Mr Lau said that property stocks would be a good bet, as 'they'll be targeted at stimulating investment in the property sector'.
