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Stock market to see slow growth, but bright outlook: brokerages

2014-12-21 15:34 Xinhua Web Editor: Yao Lan

Chinese shares are expected to see mild but stabilized growth in the long run after a recent bullish streak begins to calm.

The benchmark Shanghai Composite Index (SCI) closed 1.67 percent higher on Friday at 3,108.6 points, nearly 6 percent higher than the previous week.

However, the market fluctuated several times in the past two weeks with the SCI retreating to below 2,900 points on Monday. The daily increases are becoming more moderate compared with the peak of over 4 percent, which stirred debates over the prospects of the market.

A majority of securities brokerages have so far agreed on an optimistic outlook toward the stock market with a lower but steadier pace.

Shenyin and Wanguo Securities predicted China's stock market will maintain its gains, expecting the benchmark SCI to gradually climb to 3,500 points.

Wang Sheng, chief analyst with the brokerage, described the current situation as a "slow bull", a return from the previous crazy rising trend, as the advance of heavyweights slowed.

Echoing his remarks, Zhou Lin, analyst with Huatai Securities, said the the stocks will continue to go high with temporary ups and downs, supported by relentless capital inflow.

Other brokerages including Minsheng Securities and Southwest Securities gave out similar prediction.

China's formerly sluggish stock market witnessed a boom since late November, with daily turnover hitting a new world record on Dec.5.

However, the remarkable performance of Chinese shares was mainly led by bluechips, with most shares of small firms plummeting against the bullish market.

The ChiNext Index, tracking China's Nasdaq-style board of growth enterprises, closed 2.28 percent lower on Friday.

Wang said the investors' favor toward bluechip companies is unlikely to be reversed in the short term despite lower growth rate.

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