THE territory's share prices have taken a beating over recent weeks, due to uncertainty over whether United States interest rates will go up, but analysts say stocks could move higher once Tuesday's meeting of the Federal Reserve Open Markets Committee (FOMC) is out of the way.
The blue-chip Hang Seng Index fell 247.23 points, or 1.94 per cent, last week to close at 12,489.30 on Friday.
The US Dow Jones Industrial Average fell 15 points on Friday to 6,805, although rates fears were not seen as a major factor for the day.
Analysts said the Hong Kong market had already factored a 25-basis-point rise in US interest rates into share prices.
ING Barings sales director James Osborn said: 'If they announce a 25-basis-point rise, Hong Kong will probably recover to about the 13,000 level, because I think it [selling] is just overdone.' Peter So, deputy head of research at Schroder Securities, said: 'If interest rates are going to be raised by 0.25 per cent, the impact will be neutral.
'But if they are raised by any more, that will be negative.' Analysts said earnings growth was strong and that, whatever the Fed meeting brought, the uncertainty would be cleared and investors could focus on local fundamentals.