Hopes for US rate cut should keep the bulls charging
Hong Kong stocks last week put a pretty bow on an otherwise ugly month of trading. That optimism should carry through to this week, particularly in certain sectors.
A lot of the market's fortunes this week are riding on hopes for a further cut in US interest rates when Washington's central bankers meet next Tuesday. The US economy continues to suffer as weaker housing prices have dulled consumer appetite and the credit crisis shakes the markets.
Property stocks are the likeliest winners this week, with Hong Kong interest rates probably to follow those in the United States.
The Bank of England will also be under pressure to cut interest rates when it meets at midweek as the British economy heads into a slowdown and housing prices fall at the fastest rate in 12 years.
It could also pay off to watch the renewable energy sector this week. The United Nations Conference on climate change kicks off in Bali today and Australia's new prime minister's promise to ratify the Kyoto Protocol points to new demand for clean-energy technology. Many of those clean-energy companies come from the mainland, even if they are listed overseas. Good news from Bali should mean good news for anyone owning shares of companies that make wind turbines, solar panels and other green technology.
