Key barometer to fluctuate

By Ding Yining  |   2009-5-18  |     NEWSPAPER EDITION

SHANGHAI'S benchmark stock index is seen to fluctuate in the short term but will rebound in the future, analysts forecast.

The Shanghai Composite Index gained 0.75 percent, or 19.62 points, last week and closed at 2,645.26 last Friday.

"The market has been rather strong in the previous week with good performance of heavyweights such as PetroChina and Sinopec," said Yi Xiaobin, an analyst at Galaxy Securities. "Blue chips will continue to raise the index, with the pharmaceutical sector also expected to rise."

"We see the index to fluctuate this week before climbing to around 2,800 points in the long term," Yi added.

A separate report by Shenyin and Wanguo Securities also echoed Yi's point. "The profit-taking in the past week was temporary and normal," said Qian Qimin, an analyst at the brokerage.

"The economic data revealed in the past days were generally within expectations, and we see the index to stay stable within the range of 2,600 and 2,720 points," he added.

The rebound is not likely to be too strong and some shares may be sold by investors keen to take profit, according to the analysts.