SHANGHAI'S key stock index yesterday rose for a fifth consecutive day, with steel mills up on speculation of better earnings after they raised product prices but banks and property developers dropped amid regulatory measures.

The Shanghai Composite Index gained 0.85 percent to 2,923.90, the highest close since December 14 when it ended at 2,927.08. Turnover fell to 160 billion yuan (US$24.3 billion) from Tuesday's 187 billion yuan.

Lianxun Securities warned in a note of a possible correction for the market if turnover continues to fall.

Steel makers rose after two major Chinese mills raised their main product prices for March delivery over the past two days. Baoshan Iron and Steel Co surged 2.8 percent to 7.38 yuan after raising prices for two main products by 6.7 percent and 4.9 percent, respectively. Wuhan Iron and Steel Co added 1.6 percent after similarly raising prices.

"The price rise was mainly due to increasing iron ore prices," said Wang Zhaohua, an analyst at Sinolink Securities. "But we are cautious about steel prices in the next two months as we see weak domestic demand."

Property developers fell after the Shanghai Securities News said the banking regulator has ordered banks to prevent loans for property speculation and land purchases.

Poly Real Estate Group Co fell 1.2 percent to 13.31 yuan. Gemdale Corp shed 0.4 percent to end at 6.98 yuan.