Hong Kong shares outlook: Higher on follow-through buying/DJIA gains

HONG KONG (AFX-ASIA) - Share prices are expected to open higher on follow-through buying backed by the DJIA's gains overnight, dealers said. 	    The mild fall on NASDAQ will undermine sentiment in local telecom and technology stocks, with PCCW likely to remain under pressure ahead of its 2000 results tomorrow, they said.	    The DJIA's rally overnight should boost the Hang Seng Index at the opening and the index is expected to trade between 13,000-13,200 points for most of the day, dealers said.	    Yesterday, the Hang Seng index closed up 367.13 points at 12,950.49, off an low of 12,678.90 and a high of 12,991.88, on turnover of 8.89 bln hkd. The Hang Seng London Reference Index was up 17.41 points at 12,967.90.	    The Hang Seng March contract last traded at 13,060 points.	    The overnight rate opened at 4.625 pct, unchanged from yesterday's close, while the 3-month HIBOR was also steady at 4.8125 pct. The base rate remains at 6.50 pct.	    Ben Kwong, associate director with KGI Securities, said he expects the Hang Seng Index to meet resistance at its 10-day moving average of 13,200 points.	    "The Hang Seng Index will likely trade within a narrow band of 13,000-13,200 points today, with the 13,200 mark as a key resistance level in the immediate term," he said.	    He said sentiment has become more positive following the generally improved performance of regional markets.	    "Sentiment has been improving and the Hang Seng Index is seen staging a (further) technical rebound today on follow-through buying," he said.	    Interest rate sensitive stocks will continue to perform strongly on expectations that the Fed will cut interest rates further during the second quarter, dealers said.	    H-shares and red chips will continue to outperform on optimism over further financial reforms in China, they added.	    PCCW will remain under pressure ahead of its 2000 results, with the company expected to report a large net loss, dealers said.	    "PCCW might test 3.00 hkd in the near term," Kwong said. 

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