In the short term, there is uncertainty regarding share placements. Since August 31, fund-raising activities by various companies have raised about HK$22 billion from the market, so that is an overhang.
I think sentiment is turning a bit cautious after seeing the market rallying three days in a row, so there's profit-taking at about 16,800.
That's quite good for 2005, after the central administration implemented measures to cool down the economy.
The rise could also be attributed to some year-end window dressing activities as port related stocks has performed relatively poor earlier.
The strong sentiment of the US and Japan markets helped push up the index. The rally is very broad based.
I think the market's come to realize that economic growth in the U.S. is not threatened by higher oil and commodity prices. Regional markets also benefited from positive fund flows.
It's unclear when the Fed will stop raising interest rates. Even if the rate hike comes to an end, Hong Kong's stock market may not rebound immediately.
If the job data is stronger than expected, people will expect a longer rising trend in interest rate.
It's a bit disappointing, personally, because I expected earnings growth to be 40 percent at least for the year.
The peak of the interest rate cycle may be much higher than expected. Continued inflation in the US indicated a need for a rate hike for few more times until next year.
