Markets likely to stay firm but gains will be modest
Share markets should continue to be firm this week, but looking for significant gains may be a bit greedy of investors. How much more can you ask for with Hong Kong's blue-chip index having clawed its way to new highs after a stomach-turning drop only weeks earlier?
Oil prices will be worth watching as they may boost the share value for related industries but could cause worries for other sectors. New York crude oil is hovering around US$76 a barrel, just US$3 short of market highs.
The Organisation of the Petroleum Exporting Countries meets tomorrow, but it is not expected to raise production. High oil prices mean increased operating costs for every company on the planet, but they also mean fatter profits for mainland energy companies such as CNOOC. Global demand is predicted to rise in the fourth quarter while in the mainland some key refineries are running at below capacity due to maintenance.
Beijing is releasing a wave of economic data for last month this week, with most of it predicted to confirm and add to the already bullish sentiment. That should help underpin the market.
The producer price index is due out today, consumer price data tomorrow and retail sales on Wednesday. Industrial output data is due on Thursday and fixed asset investment numbers hit the market on Friday.