Shanghai stocks are likely to continue their upswing this week after posting an all-time record last week, analysts said.

The benchmark index could climb into the 2,350 territory, with real-estate developers leading the pack as a result of a stronger Chinese currency.

The Shanghai Composite Index, which tracks yuan-denominated A shares and hard-currency B c ips, rose 8.6 percent last week to close at 2,273.91, the highest level since the city bourse started trading in 1990.

The market advanced in all five sessions and repeatedly pushed to 16-year highs on Thursday and Friday.

The surge extended the index's year-to-date gain to 95.4 percent after four years of declines that culminated in an eight-year low below 1,000 last year.

"Due to an abundant supply of funds, the index will probably head to new highs, in a range between 2,300 and 2,350 for the week," analysts at Beijing Shoufang Investment Consultant Co said in a note.

"Property companies are expected to drive the upside, together with technology, liquor, automobile and commodity firms."

Shares of Poly Real Estate Group Co, China's biggest listed state-owned developer, jumped 15.9 percent last week to close at 41.51 yuan (US$5.31) on Friday. Shanghai Lujiazui Finance & Trade Zone Co, operator of the city's key financial district, added 15.8 percent to end the week at 13.08 yuan.

Traders expect the broad market rally to continue into the new year, but the possibility of corrections is mounting as major profit taking has not occurred since the current rally started late last year.

"If you care about gains and losses in the short term, it might not be the right time to step as there's a risk of a drop," said Lu Chengde, a Guosen Securities Co trader. "But if you take a longer view, say a year or two, it's still quite safe to build positions now."

Lu expects the index to climb as high as 2,500 within the year before possibly slipping by up to 20 percent.

"It's a bit optimistic to say the index will breach 3,000 next year, but there's no doubt it will continue this year's uptrend."

Blue chips will head further north as futures contracts based on an equity index that tracks China's top 300 firms are set to make their debut in the first quarter next year, analysts said. But the growth pace may slow and volatility will increase, they said.

Editor: Yan