bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

helpersCheckIsPostiesArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

moreOnThisArticles

urlAlias

commentCount

authorLocations

authors

paywallTypes

corrections

sponsorType

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

socialHeadline

headline

flag

firstTopic

glossary

flattenTypeIds

publishedDate

additionalInfoBoxes

images

image

relatedLinks

relatedNewsletters

__typename

createdDate

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

SCMP Reporter

THE market should see a strong technical bounce when it opens today after jobs figures released in the United States on Friday showed the economy may be slowing down, easing fears of an imminent interest rate increase.

  US bond yields slipped back from their 21/2-year high on Friday, with the long-bond closing six basis points lower at 7.91 per cent.

   Wall Street used the breathing room to rally 21 points.

  The Hang Seng Index could open up 50 to 100 points above its Friday close of 9,284.88, with most of the buying expected to be in property counters following the good profit results from Sun Hung Kai Properties.

   But beyond that prices will follow Wall Street, which is trying to figure out whether rates really need to be increased next month.

  Wall Street had fallen for four days ahead of Friday's unemployment figures, and part of its rebound was technical and, while welcomed, not entirely convincing.

  One set of pleasing figures does not outweigh the inflation figure shocks of last month and the betting money is still on a rate increase when the US Federal Open Market Committee meets on November 15.

  Until then, traders will hold their breath for two important measures of inflation this week.

  On Thursday, the producer price index will be announced and on Friday the consumer price index (CPI) is due.

  There was a record 0.6 per cent increase in the CPI last month, sending world markets tumbling and halting the Hang Seng's advance at the 10,200 level.

   Since then the market has fallen 1,000 points, and while the downside from this level is not as great, a poor set of figures this week could see it revisiting the 8,000 level.

  There are still some closet bulls who will convince their clients that the market may never see 9,200 again and now is the best time to buy.

  But the buying will be selective, from investors who have had their eye on a particular stock for a long time and want to add it to their long-term portfolio.

   Making it easier for them will be the speculators in the futures market, where sentiment remains bearish and traders are generally short.

  The 'Deng factor' may also play a part in determining market psychology this week.

   The pattern of the rumours is always the same, so at least punters will have some warning.

   The Deng Xiaoping-is-dead rumours have become a regular occurrence and always follow the same pattern.

   It usually starts with rumblings among brokers in Shanghai in the morning who have it on good authority that this time it is for real.

   By lunch the A-share index has collapsed and the rumours filter their way to the floor of the Hong Kong futures exchange, where brokerages start shorting the market.

  By mid-afternoon the story has done the rounds.

  After the market has been trashed, some large foreign house usually comes in to push up the market in a late-afternoon rally, squeezing all the over-extended Hong Kong traders.

  With little domestic news this week, brokers will have little other than rumour to trade on, so some volatile trading can be expected.

  The only major results are for Hopewell Holdings and Consolidated Electric Power Asia (CEPA), both due tomorrow.

   Neither will have much of an effect on the market as a whole but they will give investors in China-concept stocks much food for thought.

  The CEPA results in particular have been eagerly anticipated.

   Brokers are forecasting a 116 per cent increase in profits to $514 million, according to the Estimate Directory.

  The company has not been shy in touting itself as the powerhouse of Asia, and the shares have enjoyed a spectacular rally over the past month, gaining 10 per cent to $17.80.

  Hopewell's results will also shed some intriguing light on the profitability of construction ventures in China.

   Analysts are forecasting a six per cent increase in profits to $2.59 billion.

  H shares should be volatile, in line with mainland markets which had fallen during the week on the Deng rumours.

   Last week, the H-share index under-performed the Hang Seng Index by a factor of two, falling 4.39 per cent to 1,315.67.



Technical bounce on cards after jobs data