UPDATE 1-China shares rise on hopes that floor established

(For Hong Kong stock market reports, click [.HK]) (Adds analysis, individual stocks)

By Claire Zhang

SHANGHAI, Dec 24 (Reuters) - Chinese stocks rose in expanding turnover on Monday, boosted by talk that the market had established a floor at the November and December lows, though banks were sluggish and property shares remained soft.

The Shanghai Composite Index .SSEC, which began bouncing last Wednesday from near chart support at its late November low of 4,778.727 points, ended the morning 1.37 percent higher at 5,171.650, less than a point off its intra-day high.

Gaining stocks in Shanghai far outnumbered losers by 785 to 54, while turnover in Shanghai A shares rose to a fairly active 68.3 billion yuan ($9.3 billion) from Friday morning's 52.5 billion yuan.

Key resistance for the index is the December high of 5,209.705 points, any break of which would trigger a bullish double bottom formed by the November and December lows.

"A rise above 5,200 points is possible as investors are still optimistic about the overall market in 2008. So more and more people think now is a relatively safe time to buy," said Chen Jinren, analyst at Huatai Securities.

Research reports by several major Chinese brokerages published in official media on Monday forecast the stock market would rise in 2008, although more slowly than it did this year.

Shanghai Securities forecast the index would go as high as 8,000 points, Guotai Junan Securities predicted a range of 5,000-8,000, and Oriental Securities forecast 4,500-6,500 -- still implying more upside than downside. Because of this optimism about the overall market, securities shares were strong, led by Northeast Securities (000686.SZ), which soared 5.35 percent to 49.79 yuan.

Consumer-related shares also outperformed once again, especially liquor stocks such as Hebei Hengshui Laobaigan Liquor (600559.SS), up its 10 percent daily limit to 21.67 yuan.

Water supplier Beijing Capital (600008.SS) jumped 4.82 percent to 20.64 yuan after saying it had signed a strategic cooperation agreement with the southern Chinese province of Hunan to help build sewage processing plants there.

Recently listed China Railway (601390.SS) gained 3.97 percent to 11.01 yuan after soaring 16.22 percent in the previous two days. Shanghai Securities News reported last week that the firm would play a big role in building a planned railway linking Shanghai and Beijing, a project worth some 100 billion yuan. Also, the firm's Hong Kong-listed H shares (0390.HK) were added to the MSCI Global Standard indices on Friday.

Banks were sluggish in the wake of last week's interest rate hike, which may not in itself hurt their profits but still points to a tighter environment next year. Industrial & Commercial Bank of China (601398.SS)(1398.HK), the biggest bank, edged up just 0.25 percent to 8.03.

Property shares, hit this month by signs that the residential real estate market is flagging as well as by monetary tightening, stayed soft with Poly Real Estate (600048.SS) down 1.72 percent to 59.48 yuan. ($1 = 7.36 yuan) (Reporting by Claire Zhang; Editing by Andrew Torchia)