The benchmark Shanghai stock index may test as low as 1,600 this week after it lost nearly a quarter in October, analysts said.

The correction in the market is set to continue as lower corporate earnings and concerns over an economic slowdown continue to weigh on investor confidence, they said.

The Shanghai Composite Index finished at 1,728.79 on Friday, down 1.97 percent for the day and 24.63 percent for the month, the largest monthly drop since July 1994.

"People are still worrying about how deep and how low China's real economy would be affected by the global financial volatility, so we don't expect a reversal in the stock market any time soon," Shenyin Wanguo Securities' Qian Qimin said, predicting the key barometer at between 1,600 and 1,750 this week.

The combined earnings of more than 1,600 A-share companies in the third quarter have lost nearly 20 percent from the previous quarter, so investors are pessimistic over the market's outlook.

Huatai Securities analyst Chen Huiqin said the market may continue to correct at least until mid-November when key national economic data are due to be released.

(Shanghai Daily November 3, 2008)