Hong Kong shares outlook: Higher on technical rebound; cautious on FOMC

HONG KONG (AFX-ASIA) - Share prices are expected to open higher on a technical rebound, bolstered by gains on Wall Street and NASDAQ overnight, dealers said.	    They said gains will be limited by caution ahead of the outcome of tonight's FOMC meeting. The market expects a 50 basis point interest rate cut with an outside chance of a more aggressive reduction.	    Yesterday, the Hang Seng index closed down 64.35 points at 13,457.69, off a low of 13,308.41 and a high of 13,537.75, on turnover of 6.179 bln hkd. The Hang Seng London Reference Index was down 37.86 points at 13,419.83.	    The Hang Seng March contract last traded at 13,500 points.	    The overnight rate opened at 5.0 pct, compared with 4.625 pct at yesterday's close, while the 3-month HIBOR was unchanged at 4.8125 pct. The base rate remains at 7.0 pct.	    Ben Kwong, associate director with KGI Asia Securities, said he expects the Hang Seng Index to open higher following gains on Wall Street overnight.	    "The Hang Seng Index is seen opening higher, but the upside is expected to be limited amid caution ahead of the FOMC meeting," he said.	    The index is expected to hover between 13,500-13,600 points today, Kwong said.	    He said underlying sentiment remains weak, with the DJIA and NASDAQ currently trading under their critical levels.	    "The Dow is still trading under its key 10,000 point level, while NASDAQ is under its critical 2,000 points. It is unlikely we will see any substantial upside in the local market today," he said.

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