The Hang Seng Index could fall a further 200 to 300 points when the Hong Kong stock market opens today, but panic selling is not expected, say analysts.
The index is then expected to trade between 12,000 and 14,000 points this week, with strong support at 12,000 points. On Friday, it fell 8.3 per cent to a four-year low of 12,618.
Stock in HSBC Holdings is likely to be among the losers as investors continue to show concern over the global banking giant's profitability.
'The Hong Kong stock market had fallen ahead of other markets, so it may be hoped that the pace of the decline will slow down this week,' said Ricky Tam Siu-hing, a director of Champlus Asset Management.
'Taking into account that the decline in the US narrowed last Friday, I do not expect to see another 800- or 1,000-point fall on Monday. The market will be relatively stable this week in view of the settlement of this month's futures contracts on Thursday.'
Tung Tai Securities analyst Kenny Tang Sing-hing said panic selling was not likely when the Hong Kong market opened today, but trading was likely to be volatile. 'If the Hang Seng Index loses support at the 12,000 level it will fall to the next consolidation point of 10,800 - back to the beginning of the last boom cycle in September 2003,' said Mr Tang.