Chinese main stock index rose 1.19 percent on Tuesday to a new all-time closing high, as many blue chips remained in demand, though a steel sector rally ignited by Baosteel's earnings faded.
The Shanghai Composite Index closed at 3,291.299 points after hitting a record intra-day high of 3,292.578, beating the previous record of 3,273.727 reached on March 29. Gainers outnumbered losers by 677 to 201. Turnover in Shanghai A shares was very heavy at 106.6 billion yuan ($7.27 billion) against Monday's 93.0 billion yuan.
The index is near the top of an uptrend channel extending back to the end of February, which now comes in at about 3,300, and many analysts said that after the sharp gains of the past days, the market might lose steam in the short term.
"If the index continues to rise tomorrow and on Thursday, there will definitely be a dip on Friday and Monday," said Kinghing Securities analyst Zhang Yanbing. The index has risen 14.4 percent since early March.
Financials were generally firm on expectations for the imminent announcement of regulations for trade in stock index futures, since such stocks will be major components of the futures index. Merchants Bank gained 0.68 percent to end at 17.75 yuan.
The property sector was also strong with the biggest developer, Vanke, up 3.57 percent to 17.68 yuan. Baoshan Iron and Steel Co rose 0.29 percent to 10.35 yuan after saying 2007 earnings were likely to exceed its original plan, because of bigger-than-expected rises in steel prices. Its climb slowed from Monday, when it surged 4.24 percent on strong 2006 earnings, boosting the entire sector.
China Shipping Development jumped 8.07 percent to 15.67 yuan, after hitting an all-time high of 15.88 yuan, in reaction to a 5.2 percent leap of its H shares in Hong Kong on Monday and a further climb on Tuesday. Goldman Sachs this week raised its target for the stock to HK$15 from HK$11.20. Kweichow Moutai, one of the top makers of traditional Chinese liquor, reversed a decline earlier in the session to close 1.05 percent higher at 94.88 yuan after it said 2006 net profit rose more than a third and announced a pretax dividend of 0.70 yuan versus 0.30 yuan a year earlier.
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