DEVELOPERS and financial shares again led the Shanghai stock market higher today while some other shares rose on encouraging profit reports.

The Shanghai Composite Index, which tracks the bigger mainland market, was up 0.59 percent to close 2,820.50. Turnover slipped to 87.4 billion yuan (US$13.2 billion) from yesterday's 94.49 billion yuan.

Developers and banks have been strong in the past two trading days as analysts explained it was time for these blue chips to wake up from their gloomy performances since late August last year.

Zhonghong Real Estate Co rose 3.92 percent to 19.07 yuan after it said net income for 2010 probably rose 610 percent from a year earlier to about 900 million yuan. Poly Real Estate Group Co, the country's No.2 listed developer, was up 2.51 percent to 15.11 yuan. The company said that contract sales last year soared 53 percent to 66.2 billion yuan.

Industrial & Commercial Bank of China, the country's biggest lender, nudged up 0.70 percent to 4.29 yuan.

"Heavyweights such as banks and developers will be good investments from now on as investors will start to shift to cheap blue chips from overvalued small-capitalization shares," said Zhang Qi, an analyst with Haitong Securities.

He shrugged off possible negative impacts of a property tax to be imposed by authorities as he perceived the policy could barely bruise the earnings of real estate bosses by fundamentally changing China's rocketing high housing prices.

"Banks will also see a good profit this year because their loans will quite likely hit a high again from 7.95 trillion yuan in 2010," Zhang added.