Hong Kong shares outlook: Higher on tech rebound; U.S. strong econonmic data

HONG KONG (AFX-ASIA) - Share prices are expected to rebound technically, backed by gains in Wall Street last night, with sentiment also bolstered by the release of strong U.S. March new home sales data, which increased hopes of a near-term economic recovery, dealers said.	    Yesterday, the Hang Seng index closed down 25.06 points at 13,249.55, off a low of 13,139.09 and a high of 13,346.20, on turnover of 8.33 bln hkd.	    The Hang Seng April contract last traded at 13,253 points and the Hang Seng London Reference Index was up 24.58 points at 12,274.13.	    The overnight rate opened at 4.0625 pct and the 3-month HIBOR opened at 4.25 pct, both unchanged from yesterday's close.	    The base rate remains at 6.0 pct.	    Patrick Yiu, associate director of Kingsway Securities, said the Hang Seng Index will trade on a positive tone after the rise on Wall Street last night, which was boosted by the firm March new home sales data.	    "This will likely trigger a technical rebound in the local bourse after it traded in an unclear direction for the past two days," he said.	    Yiu said today's expiry of the Hang Seng April contract is unlikely to intensify the volatility in the cash market, as bargain hunting will be strong in several blue chips after their recent weakness.	    "HSBC and China Mobile should post some gains, as traders roll-over their futures positions to the Hang Seng May contract," he said.	    He said the Hang Seng Index will move between 13,200 and 13,500 points.	    Dealers said red-chips and H-shares may continue to correct downward, following the sharp losses in the A-share and B-share markets in China, on heightened concerns over the mainland government's plans for the floatation of state shares in listed firms.	    "It could be an excuse for investors to lock in profits in red-chips and H-shares from their recent gains," a dealer from a local brokerage said. 

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