Investment Daily

Owing to the fear of global economic downturn, Hong Kong equities traded lowerfollowing slump in overseas stock markets. The Hang Seng Index once lost morethan 220 points but saw strong support at 20,000. Japanese stock rebounded in theafternoon, which to boost HK stock. The Hang Seng Index rose 104 points to20,370 points, H share rose 57 points to 8,705 points. Market turnover remainedweak at HK$60bn, Europe and US banking sector were weak, HSBC(0005.) oncefell to HK$45.00 but closed 0.4% to HK$46.00. Food sector performed well,Want Want (151) and Tingyi(322) rose 1.7% and 2.9% respectively.

    New York Federal President William Dudley last Friday said the Federal Reservemust maintain a cautious and gradual approach to raising interest rates. Besides,oil price rose sharply also helped to boost energy stocks. Thanks to those positivefactors, US stock market rebounded last Friday but momentum is not very strong.

    The Dow and the Nasdaq closed 35 points (to 17,576) and 2 points (to 4,851)higher respectively. Looking ahead, US stock market has entered its quarter reportannouncement period, which will be investors major focus. Besides, investorswill also focus on the US economic data to be released including Consumer PriceIndex on Thursday.

    HK stock market turnover remained weak, reflect lack of fund flow into market.

    Besides, recent Yen strength might reflect risk averse sentiment in the market.

    Together with the weakness of Europe and US stock market, we expect localmarket to continue recent weakness while the Hang Seng Index might test itssupport at 20,000.