Analysts expected Hong Kong stocks will remain weak this month and the Hang Seng Index could drop to 16,800 points due to the October effect and global economic uncertainty.
The October effect usually refers to the psychological expectations that financial declines and stock market crashes are more likely to occur during this month than any other month.
The HSI could fall to 16,800 points if it breaks the supporting level of 17,500 amid prolonged concerns over China's recovery and uncertainties in the global economy, said Kenny Ng Lai-yin, an Everbright Securities International's securities strategist.
The benchmark index surged by 436 points last Friday to close at 17,809 points but the turnover shrank to just HK$67.7 billion as the southbound trading of the Stock Connect scheme was halted for the Golden Week holiday in the mainland.
The HSI lost 3.1 percent last month and 5.9 percent in the third quarter. It has fallen 10 percent since the beginning of the year, one of the worst performers among major stock markets in the world.
Ng suggested investors could look at oil shares including CNOOC (0883) and PetroChina (0857) as oil prices will remain elevated, which will give such shares a boost.
Elsewhere, sentiment in Macau gaming operators in the short term may also be lifted by a pick-up in travel during China's eight-day holiday, Ng added. This came after Macau's gross gaming revenue jumped more than 400 percent to 14.9 billion patacas (HK$14.5 billion) in September.
