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Financial stocks and blue chips to lead market's rise
Last Updated(Beijing Time):2007-05-08 14:44

Shanghai stocks are likely to extend their gains as they resume trading today after the weeklong May Day holiday, with financial shares and blue chips set to lead the advancers on improved earnings.

Industry analysts believed the benchmark index has a chance to test the psychologically vital 4,000-point this week as the market is set to be flushed with funds which are seeking quality counters.

The Shanghai Composite Index, which groups yuan-denominated A shares and hard-currency B chips, added 2.17 percent to close at an all-time record of 3,841.27 on April 30, the last trading day before the weeklong holiday.

For the whole of April, the barometer surged 20.6 percent, the best monthly increase ever. The shares are set to resume trading today.

"I expect investors to pile into stocks after trade resumes," said Liu Yu, an Orient Securities Co trader.

Chinese citizens opened 311,110 new stock-trading accounts last Tuesday, a single-day record high. For the first four days of last week, more than 1.2 million new accounts were set up, against about 850,000 opened for the whole of 2005.

State media have reported that listed companies which have unveiled first-quarter earnings results saw their incomes in the three-month period nearly double from a year before.

"I'd like to suggest you buy into financial plays such as banks, insurers as well as those listed firms which hold shares in profitable brokerage houses," said Wu Zhiguo, a Guohai Securities Co analyst.

"Blue chips with solid growth prospects should also be considered as the market is on track for a pattern of steady and gradual uptrend."

Industrial & Commercial Bank of China, the country's top lender, has edged up 0.54 percent to 5.62 yuan since April 25 when it announced a 52 percent rise in first-quarter net profit.

Citic Securities Co, the nation's largest publicly-traded broker, has jumped 17.3 percent in the previous three sessions to close at 59.06 yuan on April 30.

Beijing Shoufang Investment Consulting Co expects the index to fluctuate between 3,800 and 4,150 points this week. The firm said it is still upbeat about the market trend at the current stage and sees no signs of a big correction.

Source:Shanghai Daily 
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