THE benchmark Shanghai stock index may fall below the 1,800 level this week as shares are expected to follow the fortunes of global equity markets amid the financial turmoil with no end in sight yet, analysts said.

Their pessimistic view came despite a government announcement yesterday that it has scrapped the tax on interest income on shares, a move that would only have a minor impact on domestic shares as the tax was low.

The Shanghai Composite Index fell 4.71 percent last week to 1,839.62, the lowest close in two years and extended the month's loss to nearly 20 percent. Financial and steel firms led the market's fall last week.

"The basic factors affecting the domestic market are unchanged ?? the uncertainties in overseas markets and concerns over China's economic slowdown," said Qian Qimin, a Shenyin Wanguo Securities strategist. "Many firms will report third-quarter results this week, and we expect a decline which would make investors more cautious."

Qian predicted the key Shanghai index to move between 1,700 and 1,850 this week while Southwest Securities analyst Zhang Gang gave a range of 1,800 to 1,900.