BROKERS expect the Hang Seng Index to trade in the 8,500 to 9,300-point range this week, but the market is likely to remain quiet if the US dollar can be stabilised at current levels.
Last week, the dollar dropped below the 100-yen level, raising fears of a further interest rate rise in the short term, which sent shivers through global financial markets.
''We envisage no new interest [rate] rises following the next Federal Reserve meeting in early July,'' said Eugene Law, research director at Standard Chartered Securities.
However, the fear of rising interest rates is driving institutional investors away from equity markets.
In addition, given the large number of warrants expiring by the end of the month - 15 in all - a slight pressure is expected on the market as the exercise increases the scrip supply and creates a shortage of funds to absorb it.
''Currently, foreign institutions are preoccupied with the volatile US currency and the bond market,'' said Samuel Law, research director of Seapower Securities.
But genuine market movement will not occur until something more concrete materialises to break the deadlock, giving investors grounds for committing themselves.
