Themis Qi
Hong Kong stocks are expected to continue struggling despite Beijing's 10 trillion yuan (HK$10.83 trillion) debt relief package and the United States' rate cut, while US stocks showed signs of being highly overvalued following Donald Trump winning the presidential race.
Last Friday, China's Standing Committee of the National People's Congress said it would raise the quota of swapping local government debts by 6 trillion yuan and allow the local government to use 800 billion yuan each year for five years from the special bonds, largely matching market estimates.
The US Federal Reserve also announced a 25-basis-point rate cut in its November meeting, in line with expectations.
But Hong Kong's market benchmark Hang Seng Index dipped 1 percent to 20,728 points last Friday, ending the previous week with a 0.7 percent rise.
Kenny Ng Lai-yin, securities strategist at Everbright Securities International, estimates the HSI would move between 20,000 and 21,000 points because investors would shift their focus towards the effect of these policies, which will take a certain time.
Dickie Wong, executive director of research at Kingston Financial Group, predicted the HSI would float around 20,600 points, as investors are turning to a wait-and-see attitude before Trump announces his new policies.
This week, Tencent (0700) is expected to post an 8.6 percent rise in revenues and a 25 percent jump in its net profit for the third quarter on Wednesday. The quarterly earnings of Alibaba (9988), JD.com (9618) and Lenovo (0992) will be released on Thursday and Friday.
Mainland China will announce October's retail sales and industrial profit while the US will disclose its consumer price index.
Meanwhile, the Buffett Indicator - an index named after billionaire investor Warren Buffett - soared to 209 percent, sparking speculation that the US stock market is likely producing a bubble.
Bitcoin shot up to US$79,985 (HK$623,883), a fresh record high, after Trump showed a larger lead during the election vote counting.
Stocks are expected to move between 20,000 and 21,000 points. SING TAO
