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Fluctuations before rebound

THE key Shanghai Composite Index may continue to fluctuate in the short term before rebounding, analysts said.

The barometer lost an accumulative 7.9 percent last week to end below 2,100 points on a lack of confidence in the market and the plunge by heavyweight stocks.

A total of 10.8 billion shares will become tradable this week. The total market value of these non-tradable shares is up to 128.6 billion yuan (US$18.8 billion), the biggest weekly amount since the start of this year.

"The selling of these non-tradable shares, as well as the intention of investors to take profit, would bring pressure to the market, and more capital is likely to flow out of it," Xu Yingtao of China Jianyin Investment Securities wrote in a note.

"The economic situation is still critical but it's very likely the statistics of the first quarter this year would be better than the fourth quarter in 2008, and by then we would have a better outlook on the stock market," the note said.

Investors need to "focus on companies with good performance in the past year since in the next two months many listed companies will release their earnings reports for the past year, and some of the stocks maybe undervalued," said Hu Chunming, an analyst at Minsheng Securities.

Wang Zhiyong, an analyst of Hongyuan Securities, said it would be "a good buying time when the index drops below 2,000 points."


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