STOCKWATCH: HK stocks might climb up to 13700 on US rally

All eyes and ears are waiting for FED rate-cut talk results. General caution has resulted in a sense of lack of direction. Battering of HSBC Holdings (0005) accounted for the broad market fall yesterday. Since the possibility of a 0.5% rate-cut has long been anticipated and fully reflected in the market, there may be a certain brief bounce after the eventual rate-cut announcement but the general adverse situation cannot be expected to be thus remedied. The market will be ruled by stagnation in the foreseeable future. The HSI charts have indicated signs of a declining tendency at 13300-level. Without unfavourable news, Hong Kong stocks may still have some breathing space, but RSI, has been loitering in the weak zone and has displayed as yet no signal of a return. The fact that turnover has remained on the meagre side denotes a void of willingness to invest, in no way helpful to any rebound. With the US market still groping for direction, Hong Kong stocks will be affected. US stocks were positively stimulated by anticipation of a 0.75% rate-cut last night: Hong Kong stocks might be motivated to climb up to 13700 today.

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