No Rebound as Trading Low

Shanghai stocks are not likely to stage a sharp rebound this week as turnover has been quite low recently, analysts said.

The benchmark Shanghai Composite Index rose on Friday, narrowing last week's loss to 0.33 percent. The index jumped 2.01 percent to close last week at 2,397.37, led by Baoshan Iron & Steel Co and the Bank of China which posted better-than-expected half-year results. Anticipation of positive measures to boost the stock market also helped the barometer close higher.

But Shenyin and Wanguo Securities stock strategist Qian Qimin said although trading volume recovered slightly on Friday, the value was less than 60 billion yuan (US$8.76 billion) in Shanghai and the smaller Shenzhen market that day, which he viewed as low.

We saw some positive trends from technical charts, but in the absence of a huge turnover, any rebound won't be major, Qian said. He expects the Shanghai index at between 2,200 and 2,400 this week.

Yi Xiaobin, an analyst at China Galaxy Securities, echoed Qian's view, saying weak turnover was the main reason preventing a sharp rebound, as many investors stay sidelined.

The index will rebound gradually, Yi said, adding that now is the time to buy given the current low valuations in the market. He said the index, which is now 60 percent below its record peak last October, could move in a range from 2,300 to 2,600 this week.

Some analysts have also said once it's clear there are no positive measures, the market is likely to come under selling pressure today.

Source: CRIEnglish