China's main stock index ended a strong four-day rising streak on Tuesday as PetroChina and other large-caps fell back. But most shares continued to rise and turnover stayed active.
The Shanghai Composite Index, which had gained 8.2 percent over the past four trading days in a rebound from near chart support at its late November low of 4,778.727 points, ended Tuesday 0.63 percent lower at 5,201.181.
But gaining stocks in Shanghai outnumbered losers by 576 to 259, while turnover in Shanghai A shares remained active at 124.7 billion yuan ($17.0 billion) against Monday's 139.5 billion yuan.
The index's pull-back on Tuesday left a question mark over whether the market finally established a floor this month in preparation for an uptrend that many investors think is likely in early 2008.
On Monday the index closed above its early December high of 5,209.705, appearing to trigger a bullish double bottom formed by the November and December lows and pointing above 5,600 points in coming weeks. But the index's drop back below the early December high on Tuesday suggested that resistance had not broken cleanly. Optimists pointed to the higher turnover and strength in most second- and third-tier stocks as signs that the market would soon resume rising.
"The market is staying firm after jumping so much in the past four days, and this is a good sign. Institutions will not miss their last chance to buy this year, so the uptrend may well continue this week," said Li Shiming, analyst at Galaxy Securities.
However, others said concern about tightening monetary policy and slowing corporate profit growth could keep a lid on stocks. "The index will not move too much, certainly not in the remaining three trading days this year - there are unlikely to be any major factors to push it up," said Xu Yinhui, analyst at Guotai Junan Securities.
PetroChina, the most heavily weighted stock, slipped 2.22 percent to 31.25 yuan in what traders said was profit-taking after it jumped 4.65 percent on Monday. China Pacific Insurance, the country's third-biggest life insurer, closed up 61 percent at 48.17 yuan in its Shanghai debut, near the high end of market expectations.