STOCK prices resumed their downward trend yesterday following unsettling news from the United States which has again raised fears interest rates may be increased next month.
The Hang Seng Index fell 50.19 points to close at 9,338.59, a drop of 0.53 per cent.
The latest set of statistics to come out of Washington show the retail sector is galloping away, with new housing starts up 4.4 per cent. Wall Street seems easily spooked by statistics these days, and this latest batch had its affect on bond yields which shot up to just short of the eight per cent level.
Analysts are convinced there will now be an increase in interest rates of 0.5 percentage points next month, which may be followed by another increase just before Christmas.
The next major statistic is the unemployment figures, which are due out on November 4.
Given the outlook for interest rates, brokers in Hong Kong said it was difficult to see how Hong Kong Stocks could stage a year-end rally.
