Hong Kong stocks may face pressure this week, after China kept mum on the scale of fiscal stimulus it announced over the weekend, and amid the threat of deflation in the mainland.
The consumer price index rose 0.4 percent year-on-year last month, the slowest in three months, while the producer price index fell 2.8 percent year-on-year in September, its fastest pace in six months.
Finance Minister Lan Foan told a news conference on Saturday that there will be more "counter-cyclical measures" this year, but officials did not provide details on the size or timing of fiscal stimulus being prepared, which investors hope will ease deflationary pressures in the world's second-largest economy.
Meanwhile, the State Council will host a press conference today on increasing support to enterprises. Officials from the State Administration for Market Regulation and the National Financial Regulatory Administration will be among those present.Kenny Ng Lai-yin, securities strategist at Everbright Securities International, estimates Hong Kong's benchmark Hang Seng Index will range between 20,000 and 23,000 points - either a fall of 5.8 percent or a rise of 8.2 percent from its close of 21,251 points on Friday.
Dickie Wong, executive director of research at Kingston Financial Group, also projects the HSI to move downward and then struggle around the 21,000 mark.In contrast, China International Capital Corporation (3908) said A-shares in Shanghai and Shenzhen have basically hit the bottom, and the mainland investment bank expects more details to be announced by the finance ministry.
China's financial institutions including Golden Credit Rating International estimate the fiscal stimulus to be at least 4 trillion yuan (HK$4.39 trillion).
