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Last Updated: Tuesday, 26 June 2007, 10:13 GMT 11:13 UK
Caution despite China share rise
Chinese investors study stock market movements
Chinese investors have had a rollercoaster ride in recent days
Chinese shares have recovered slightly after the heavy falls of recent days but investors remain cautious as inflation fears persist.

Shares have been on the slide since a top official said key interest rates may rise further to curb rising prices and excess liquidity in the economy.

Before the recent falls, Shanghai's main share index had more than doubled in value this year.

Share trading levels are now at their lowest for three months.

Bargain hunting

The Shanghai composite index closed up 32.29 points at 3,973.37 on Tuesday, a rise of 0.8%.

It had fallen 3% in each of the two previous sessions.

But analysts said the rebound could be temporary, with further falls likely as the government considered tougher measures to cool the surging economy.

"The market was helped by some bargain hunting but the buying was not that strong," said Jin Fang, from Xinwang Investment.

"The corrections are likely to continue in the near future because of lingering worries over liquidity pressure."

The market was boosted by the successful debut of shipping firm Cosco Holdings, the latest in a series of large Chinese firms to list their shares in recent weeks.

Its shares gained 93% on their first day of trading.

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