THE local stock market is expected to stabilise at present levels after the Hang Seng Index shed 432.5 points, or 5.26 per cent, last week.
Unit trust redemptions, fear of another interest rate rise and deteriorating property prices led to heavy selling last week, sending the index below 8,000 points on Friday to a year-low of 7,723.43.
Turnover increased to $4 billion on Friday.
Also hurting sentiment was the decision by Fidelity's Magellan fund not to pay a dividend and California's Orange County declaring bankruptcy.
In New York, the Dow Jones industrial average closed 5.38 points higher on Friday, providing an excuse for bargain-hunting this week.
Although the direction of the local market is dictated by movements on Wall Street, it does not always react positively to news from the US market.
Should the Hang Seng fall further, strong support will be between 7,500 and 7,600 points, brokers say.
