AFTER another banner week which saw the stock market gain a further 119 points and trade $24.32 billion, investors will be faced with the tough choice of whether to chase prices up or wait for a correction. Friday's losses on Wall Street on the back of higher-than-expected employment data will probably see investors cautious, especially as the likelihood of an interest rate increase is now much greater. Analysts had hoped for an increase in non-farm payrolls of about 205,000 for June. The actual figure was 259,000, indicating the United States economy was still roaring ahead unfettered by the interest rate increases. A rate increase of 25 basis points to 50 points is expected when the US Federal Reserve meets in two weeks' time. With world equity markets easing off and the long bond yield shooting up, it will be difficult for the market to make significant gains this week. It is more likely the buyers will wait for prices to ease off. The jury is still out on whether Hong Kong equities can continue to outperform world markets or whether the window of opportunity is now closed. By the end of last week, the strain was starting to show with volumes slackening off and clients preferring to chase undervalued second-line stocks which have been largely left out of the rally. Is this a sign that investors consider blue chip stocks to be fully valued, or is it merely a case of chasing better-valued second-line stocks? The signals coming from the market are mixed, reflecting the two-way trading. Earlier in the week, Japanese investors were heavy buyers of stocks, possibly to fill up the number of specialist closed-end trusts launched over the last month to take advantage of the strong yen. Yet by Thursday and Friday both Nomura and Daiwa were reported to be heavy sellers of the market through futures. Whether this was part of a ploy to keep the market down or whether it was because they genuinely believe the market has peaked is open to interpretation. On Friday, Nomura reiterated its support from the Hong Kong market predicting a year-end close of around 11,000. The brokerage dragged up the old issue of an airport agreement and said there was room for optimism. The overall picture still looks good with most brokers saying the market looks well supported at the 9,500 level. Last week saw the market close down on two days, but the market never got near testing the 9,500 mark. Brokers said this was a good sign, indicating the market had more upside potential. Traders will be keenly looking for the market to challenge the 9,800 mark this week. The key to the index performance next week will be HSBC, which reports its interim profit results on August 15. As the biggest company in the Hang Seng Index, a good performance will be required to push the index up to 9,800 and beyond. Analysts' forecasts are generally bullish, expecting 20 per cent profit growth to around $11 billion for the interim. This has some brokers worried that there may be too much positive expectation in the share price. If the results are not excellent, a wave of selling could see the counter slip back to the $80 level and take the better part of the index with it. Property fears appear to have diminished for the meantime with investors either shrugging off or completely ignoring any bad news from the property sector. On Friday, it was revealed that Sun Hung Kai had only attracted about twice the number of buyers for the number of flats available. In most countries that would be a good result, because the company gets to book the profits no matter how many times the flats are oversubscribed. But in Ma On Shan, real estate agents were complaining that it was one of the worst results in a long time. The good news was Sun Hung Kai's stock price hardly budged, only closing 75 cents lower at $51.25, indicating the outlook for property stocks would probably not be harmed.