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

CAUTIOUS trading yesterday sent the market below 9,400 points ahead of an expected interest rate rise in the United States on Tuesday.

  The Hang Seng Index stood at 9,390.76 points, down 14.72 points, or 0.16 per cent. The index stayed within a 39-point range.

  Void of selling pressure, turnover was at $1.69 billion, the lowest since July 6.

  'Trading was quiet,' said David Williamson, vice-president of Salomon Brothers.

  Investors were hesitant, anticipating an expected interest rate rise by the US Federal Open Market Committee (FOMC) on Tuesday, Mr Williamson said.

  Investors preferred staying on the sidelines.

  Uncertainties over interest rates also sidelined fund managers.

  They said stock markets in the region would become weaker ahead of the FOMC decision.

  'The market is in the process of searching for a bottom,' a broker said.

  Market speculation is that FOMC will increase interest rates by either 0.5 or 0.75 percentage points.

  Mansion House said it did not expect a half percentage point increase in the Fed rate to have a 'significant impact' on the stock market.

  'However, if the 30-year US Treasury bond yields stay above the eight per cent level for a longer period, liquidity outflows from the stock market are likely to be caused by the high bond yields,' it said.

  Mansion House believe that US interest rates will remain stable at this year's peak level.

  'If economic recovery in the European countries is unexpectedly strong and fuels the economy of the United States in terms of inflation and economic growth, the Fed may raise the rate another one or two times to 5.5 per cent or six per cent during 1995 for insurance purposes.'   Though the Republicans won the mid-term election in the US, the news did not stimulate the market much.

  'Investors are nervous about the movement of the New York stock market as its performance was volatile following the election news,' a broker said.

  The Dow Jones index gained about 30 points on the election win by the Republicans but ended just one per cent point up on Wednesday.

  'If the Wall Street market remains stable, Hong Kong investors will continue bargain hunting,' he said, predicting the index would be just over 9,400 points today.

  He added the market sentiment was 'cautious but not bearish'.

  A bout of buying by Japanese investors mid-day helped the index recover.

  Brokers said Japanese investors were interested in the Southeast Asian stock markets, especially Hong Kong where the stocks were relatively cheap in terms of the price-earnings ratio.

  Blue chips still dominated the trading activity, accounting for 57.57 per cent of trading volume.

  Their performance was mixed, with 13 lower, 10 higher and 10 unchanged. Despite some Japanese buying, Hongkong Telecom failed to get escape the trend, with its price falling 1.26 per cent to close 20 cents lower at $15.65 on a turnover of $79.22 million.

  Henderson Land continued to take a beating, falling 20 cents to finish at $49 on a turnover of $60.84 million.

  A technical rebound helped China Light & Power gain 10 cents to close at $38.60.

  The properties sub-index was the only winner of the day, notching up 7.3 points to 16,827.13 points.

  The two largest property developers, Sun Hung Kai Properties and Cheung Kong, were the best blue chips in terms of turnover.

  Sun Hung Kai Properties was the day's heaviest traded stock in turnover of $89.94 million.

    The counter finished the day flat at $57.250.

  Cheung Kong was flat at $36.70 on a turnover of $83.58 million.



Hang Seng dips ahead of talks on rates