THE market appears destined for a further correction this week as uncertainty continues over interest rates and the dollar's slide, brokers say.
''The Hang Seng Index will again test its all-time low for the year at 8,200 to 8,300,'' said Samuel Lau, research director at Seapower Securities.
Even though the market is undervalued in terms of fundamentals, brokers believe the short-term correction will persist.
''The uncertainties are the US interest rate hike, the US dollar's downfall and the local property market clampdown,'' said Mr Lau.
He added it was reasonable to believe that the index would trade in a range between 8,300 and 9,000 in the next four weeks.
The downside risk is limited, as reflected by the resurgence of the index last week on the strength of a technical rebound at the 8,200 to 8,300 level.
''In the short term, it looks like another dull week,'' said Eugene Law, research director of Standard Chartered Securities.