Hot stocks and cooling measures Up, up and away is likely to be the theme in equities this week, even as the mainland government scrambles to keep the market under control. The People's Bank of China on Friday announced a 27-basis-point rise in interest rates following stronger-than-expected economic data last week. This was quickly followed by an announcement that the tax rate on interest income earned on bank deposits will be cut from 20 per cent to 5 per cent. With the economy growing at its fastest rate in a dozen years and consumer prices rising rapidly, the moves were in line with expectations and were not expected to hit stocks hard in the short term. But there could be more measures to cool the economy this week. All the numbers show the mainland economy continues to grow at a dizzying rate. Hong Kong traders are also rubbing their hands together and getting ready for the Hang Seng Index to hit 24,000 after another record close on Friday, while other regional markets, such as South Korea and the US stock market also appear to be headed for further gains. Bullish investors piling into the stock market are unlikely to give much thought to downside risks this week, even though there are a few clear threats. Beijing's tightening measures aside, expectations for second-quarter corporate earnings are high as investors predict that the booming economy will translate into fat profits. If one or two big names come in below expectations buying interest could quickly sour. Shadow of high oil prices High oil prices should be viewed as another threat to stock markets, but most investors are likely to see this as a buying opportunity. Look for investors to dump money into resources such as gold and oil, which continue to climb on tight supply and strong demand, particularly from the mainland. London crude oil prices are near their all-time high of US$78.65, set one year ago and that level is within reach this week if African supply problems persist while Asian buyers slurp up energy at a rising pace. High oil prices and a weak US dollar are also pushing gold prices up and traders are already talking of US$700 an ounce being within sight. However, the traditional safe haven for investors has been in a steady upward march, making some analysts wary of profit-taking. The US on Thursday will release durable goods order data for June, which will give an idea of how the US manufacturing sector is doing and in turn offer a clue to how Asian exporters are faring. The IT portion of the data will be particularly important. It has been doing well, which is good news for exports from this region. There is no initial public offering action expected this week as bankers are off on summer holidays. Focus on consumer safety Meglena Kuneva, the European commissioner for consumer protection, is in China this week to meet with industry heads and officials on consumer safety issues. Although food safety is on everyone's lips, Ms Kuneva is in China to discuss non-food issues, and is meeting the Chinese General Administration of Quality Supervision, Inspection and Quarantine and the State Administration of Industry and Commerce. She will be speaking to the press tomorrow.