SHANGHAI Jan 31 (Reuters) - China's main stock index ended up 1.4 percent at a two-week closing high on Monday, extending three days of rises, underpinned by selective buying in some sectors seen supported by government incentives.
The Shanghai Composite Index .SSEC finished at 2,790.7 extending a 1.4 percent rise last week. But the index has dropped 0.6 percent this month after falling 0.5 percent in December.
The index fell this month due to a shortfall of cash in the domestic money market, a raft of anti-inflation measures including a hike in bank reserve ratio, price controls and the introduction of the country's first-ever property taxes.
"It's (today's rise) a continual rebound," said Wang Aochao, an senior analyst at UOB Kay Hian in Shanghai.
"The positive news also give investors a good chance to speculate some selective sectors, such as water shares." ($1 = 6.58 yuan) (Reporting by Chen Yixin and Kazunori Takada)