Hong Kong shares outlook: Mixed to lower ahead of FOMC meeting

HONG KONG (AFX-ASIA) - Share prices are expected to open mixed to lower, as investors are seen remaining sidelined ahead of the FOMC meeting later today, dealers said.

	    They said financials and properties may extend their losses, as recent U.S. economic data has signalled a more robust economy than previously expected, reducing the possibility for further aggressive interest rate cuts.

	    Yesterday, the Hang Seng index closed down 377.44 points at 13,259.17, off a low of 13,239.15 and a high of 13,608.84, on turnover of 6.84 bln hkd.

	    The Hang Seng May contract last traded at 13,210 points.

	    The Hang Seng London Reference Index was down 14.66 points at 13,244.51 Overnight rate opened at 3.8125 pct, compared with 3.75 pct yesterday's close and the 3-month HIBOR opened at 3.875 pct, unchanged from its previous close.

	    The base rate remains at 6.0 pct.

	    Simon Tam, dealing manager of Sasson Securities, said investors will be cautious in the run-up to the FOMC meeting later today, with financials and properties likely to remain weak.

	    "Investors will be nervous that the U.S. Fed will not cut interest rates as aggressively as had been anticipated," he said.

	    "However, downside of the Hang Seng index will be limited after the negative performance yesterday, and we may see some bargain hunting in late trade," he said.

	    Tam said the index will move between 13,200 and 13,400 points today.

	    Dealers said tom.com will post some gains in connection to reports that it has agreed to invest over 2.0 bln twd in PC home group and Cite Publishing group in Taiwan.

	    Tom.com will hold a press conference later today to unveil a strategic investment.

	    "It will be positive to the company, because it will widen its source of income," a dealer from a local brokerage said.

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