A rebound could happen in the Shanghai stock market, which
reopens today after the Spring Festival holiday, while analysts expect
fluctuations would continue in the Year of the Mouse.
They added the market is still in a technical correction, caused
by a major slump late last month, although it had recovered 8.13
percent last Monday. The Shanghai Composite Index fell 1.55 percent
to 4,599.7 last Tuesday, the last trading day before the market
closed for the Spring Festival.
Earlier, the benchmark had posted the steepest weekly drop in
more than a decade in the week ending February 1, amid concern the
worst snowstorm in 50 years in the country would hurt economic
growth and worsen inflation. The index was also influenced by a
possible United States recession.
Valuations in the A-share market had also been reduced by the
slump late January to a more reasonable level now, analysts
added.
The index should gain today if history is any guide. The
barometer had risen in 13 of the 17 first trading sessions after
the Spring Festival since 1991.
United Securities, a brokerage, said the index could face
resistance around 4,780 to 4,810 in short term, and if the level
was breached, it could challenge within a range of 4,890 to 4,920.
On the downside, the barometer could find its bottom between 4,330
and 4,360.
Last Monday's surge was a result of the government's
intervention to support the market, with some media reports saying
the government may adjust its three-month-old monetary tightening
campaign.
Orient Securities recommended investors to include retailers,
highway operators, utilities, property developers and banks into
their stock portfolios for this month as these sectors may benefit
from easing monetary policies and with regard to valuations.
(Shanghai Daily February 13, 2008)
