The stock market rebounded for a second day yesterday, with analysts predicting it will climb to the pre-correction levels of a week ago.

The benchmark Shanghai Composite Index yesterday rose 69.72 points, or 1.21 percent, to close at 5843.11 points, with losing stocks outweighing gainers by 628 to 249. The indicator surged to 5906.69 points before it closed slightly down. Turnover on the Shanghai exchange totaled 102 billion yuan, down 7 percent from the previous day.

The market has recovered 175.78 points over the past two days – nearly half the ground lost over the previous four trading days.

The smaller Shenzhen Component Index also climbed 0.81 percent to close at 18761.90 points.

Analysts said the market recovery will continue in the next few days, as the large-caps, major financial and property shares, keep pushing up the indicator.

Haitong Securities yesterday soared 8.35 percent to a record high of 66.45 yuan. Gemdale Property soared 6.62 percent to 56.41 yuan, while Huaye Property also jumped 8.22 percent to close at 16.32 yuan.

But analysts said the market is unlikely to rise as sharply as it has in recent months.

“Investors are likely to take cautious steps in the coming weeks as uncertainties about macroeconomic policies continue to hang over the market,” said Zhang Xiaojun, an analyst at CITIC China Securities.

Analysts said room for the market to rebound is limited, at least in October, as it lacks bullish factors to break through the 6000-point barrier. The index surged to 6124 on October 16 before the correction.

Source: China Daily

Copyright Fund China 2009.

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