Market likely to maintain upward velocity

By Joyce Pan  |   2009-4-13  |     NEWSPAPER EDITION

THE Chinese mainland's stock market is likely to sustain the upward momentum this week on investor expectation that the economy would pick up in the second quarter, analysts said.

Analysts were upbeat over the local benchmark index as they believe investors are fully prepared for the first quarter macroeconomic data, which are to be released this week. They are hopeful investors would not be cowed by expectations that financial figures may disappoint and instead express confidence the economy would bottom out in the second quarter.

The Shanghai Composite Index closed at 2,444.23 points, the highest since August 20, for the fourth consecutive weekly gain last Friday.

"Financial institutions see signs of an early economic recovery and expect better economic conditions to grow," said Xu Zhiqiang, an analyst with Galaxy Securities Co. "We remain optimistic on the future trend, considering the influx of institutional investments. Investors would be better to pay close attention to the changes in transaction volume" of the market.

The index is likely to range between 2,380 and 2,550, said Qian Qimin, an analyst at Shenyin and Wanguo Securities Co.

"It is natural to see some correction during the week amid profit taking, but the overall picture shows investors are willing to enter the market," Qian said. "The market's strong performance will not change in the short and mid terms."