Upward trend seen extended

Shanghai stocks are expected to rebound today, the first trading day after the week-long Spring Festival holiday, analysts said.

Government policies and turnover volume will determine the trend of the market, which will recover if turnover doesn't shrink sharply, according to Beijing-based Jeweldia Investment Consulting Co.

The Shanghai Composite Index dipped 0.71 percent, or 14.29 points, to close at 1,990.66 on January 23, the last trading day before the Spring Festival holiday last week.

Overseas markets were positive last week, with the Dow Jones Industrial Average dipping 0.95 percent, Hong Kong's Hang Seng Index gaining 5.56 percent and Japan's Nikkei stock average rising 3.2 percent.

The less-than-expected impact over corporate earning reports, the abundant liquidity, the rising credit and stable demand showed that valuation still has room to grow, said Shenyin & Wanguo Securities Co.

Industrial Securities Co also expected last month's upward trend to be extended this month and suggested investors focus on heavyweights.

Essence Securities Co suggested investors hold medical stocks on hopes of faster earnings growth.

China last month said it will invest 850 billion yuan (US$124 billion) to improve its health care system over the next three years. A program will be launched this year to reform the administration, operations and supervision of public hospitals.