Overseas Markets' Gains May LIft Index

The Shanghai Composite Index is expected to rise when the market reopens today after the three-day New Year holiday to emulate gains in global markets which started this year's trading on Friday.

Investors may chase stocks of some telecommunication firms and auto makers after the central government approved the issuance of licenses for 3G high-speed services and announced more measures to encourage purchases of small-engine cars, analysts said.

Major global markets such as Hong Kong, Singapore and Wall Street closed higher on Friday.

The key Shanghai barometer is coming off the worst meltdown in its 18-year history, down over 65 percent last year to close at 1,820.81. This makes Shanghai the world's worst-performing major stock market last year. Still, analysts said the index may remain at low levels early this year.

Shenyin and Wanguo Securities strategist Qian Qimin said the Shanghai index could fluctuate narrowly this month, which has only 15 trading days because of the New Year holiday and the Spring Festival holiday which starts on January 25.

The market sentiment could be depressed this month when the fourth quarter economic data are unveiled and many companies start issuing warnings for last year's earnings performance.

"The macro-economic data results are set to be grim and this will tell a picture of the corporate earnings picture in 2008," Qian said.

The Shanghai index rose 130 percent in 2006 and nearly doubled in 2007.