Cheung Kong was up HK$4.75 in London trade on Friday, so Hong Kong investors are catching up.

Even though the interest rate rise had been discounted, a half percentage point rise in local interest rates will mean that earnings and gross domestic product growth will have to be revised down so there is no commanding reason for people to commit themselves to the market in a large way.

Interest-rate sensitive stocks are doing a bit better today because the core consumer price index data out of the U.S. shows that inflation is still quite tame. Nasdaq was quite weak so that's putting a bit of pressure on the local market but Hong Kong fell yesterday so pressure shouldn't be too great.

The whole psychology of the market has changed since the U.S. unemployment figures on Friday. All the U.S. economic statistics in May have been weaker than expected so now people think the interest rate rises since last June are really starting to work and the Fed may not even raise rates when it meets on June 28.

The index is revolving around 16,000 and trying to establish further support at that level.

Sentiment on junior high-tech stocks and China high-tech stocks is quite negative for the time being and until we see Nasdaq stabilize we won't see a big change in the market psychology.

The 13,500 level is the next crucial support level but I don't think we'll see the HSI falling that far today.