Analysts see stock wobbles

By Leo Zhang (Shanghai Daily)
Updated: 2007-03-26 09:10

"Some low-valued stocks have posted irrational gains recently, which sparked regulatory concerns over stock-price rigging and little awareness of risks," said Zhou Lin, a Huatai Securities Co analyst.

"Investors should be cautious against firms with sudden rises and the market may start to fluctuate."

China is set to launch its first equity-index futures contracts late in the second quarter based on a gauge that tracks the biggest 300 companies listed in Shanghai and Shenzhen.

Market watchers noted as the date draws near that fund managers may build up heavy positions on the underlying blue chips with an aim to trade the futures contracts as soon as the business starts.

"A short-term correction is needed to digest the recent rally," said Zhao Yuanhui, a Donghai Securities Co analyst.

"But I believe the market will likely continue to head north on the back of performances in heavyweight counters and quality chips."

The index may move in a range between 3,015 and 3,150 this week, Beijing Shoufang Investment Consulting Co said. The consultancy expects better performances in technology and telecommunications firms.


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