Hong Kong shares outlook: Higher on technical rebound/Wall Street

HONG KONG (AFX-ASIA) - Share prices are expected to turn higher on Wall Street's rebound, although upside will be limited ahead of the release tonight of U.S. nonfarm payroll data, dealers said.	    They said red chips and H-shares are seen rising on signs that Sino-U.S. tensions may ease after U.S. President George W Bush expressed regret over the missing Chinese pilot, following the incident between U.S. and Chinese military aircraft over the weekend.	    On Wednesday, the Hang Seng index closed down 520.51 points at 12,063.71, off a high of 12,427.79 and a low of 12,062.84, on turnover of 7.83 bln hkd.	    The Hang Seng April contract last traded at 12,090 points.	    Last night, the Hang Seng London Reference Index was down 0.47 points at 12,063.24.	    Overnight rate opened at 5.0 pct, compared with 4.875 pct Wednesday's close and the 3-month HIBOR opened at 5.0 pct, unchanged from its previous close.	    The base rate remains at 6.50 pct.	    Patrick Yiu, associate director of Kingsway Securities, said the Hang Seng index will rebound technically, boosted by Wall Street's rally last night.	    "Wall Street was sharply higher last night after the positive earnings news from Dell and Alcoa," he said.	    "However, sentiment will be cautious ahead of the release of some U.S. employment data tonight ... strong resistance will appear at 12,500-600 points," he said.	    He said the Hang Seng index will move between 12,250 and 12,600 points in today's trade.	    Dealers said red chips and H-shares will perform well, on expectation that the Sino-U.S. tensions will ease after the U.S. expressed regret over the missing Chinese pilot.	    "Their dispute should end in a few weeks ... it should not have a serious negative impact on red chips and H-shares," a dealer from a local brokerage said.    

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