Hong Kong shares outlook: Higher on follow-through buying, after NASDAQ gains

HONG KONG (AFX-ASIA) - Share prices are expected to open higher on follow-through buying, with telecom stocks likely to benefit from the overnight gains on NASDAQ, dealers said.

They said the Hang Seng index will however remain rangebound for the day in the absence of further leads both domestically and regionally.

Red chips and H shares will remain buoyant, bolstered by the gains of B shares in the mainland markets, they added.

Yesterday, the Hang Seng index closed up 262.09 points at 13,721.27, off a low of 13,465.72 and a high of 13,732.40, on turnover of 8.61 bln hkd. The Hang Seng London Reference Index was down 27.33 points at 13,693.94.

The Hang Seng May contract last traded at 13,753 points.

The overnight rate opened at 3.8125 pct, compared with the previous close  of 4.0 pct, while the 3-month HIBOR was at 3.90625 pct, against 3.875 pct. The base rate remains at 5.50 pct.

Ben Kwong, associate director with KGI Securities, said: "The overnight gains on NASDAQ should provide support for the Hang Seng Index today, especially in the telecom sector."

He said he expects China Mobile to test 40.00 hkd today following the gains on NASDAQ.

The Hang Seng index should see resistance at around 13,800 points, he said, adding that the medium term range for the index will be around 13,500-14,000.

Dealers said Pacific Century CyberWorks may encounter some selling pressure today on a press report quoting a staff union leader as saying that the company has not guaranteed there will be no job losses as part of a 

proposed switching of its call centre operations to Guangzhou.

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