Shanghai shares are seen to be mixed this week, with blue-chip counters likely to be sought for their growth prospects and while good-value small-cap issues will probably be ignored.

Analysts believe the benchmark index will be limited in its rise or fall as investors become divided over the market's trend. Daily turnover is set to stay hectic and a wider intraday volatility may be the order of trading, they said.

The Shanghai Composite Index, which tracks both yuan-backed A shares and foreign-currency B chips, tumbled 4.28 percent last week to close at 4,000.74 on Friday, with losses due to a rise in stamp duty imposed on share trading.

The index slumped 6.5 percent on Wednesday after the Ministry of Finance tripled the stamp duty on share transactions to 0.3 percent. The plunge was the biggest single-day percentage dive since 8.8 percent drop on February 27.

Turnover was extremely heavy last week, coming in at 1.26 trillion yuan (US$165 billion), the biggest weekly figure since the bourse started to trade in 1990.

"The market tends to grow mixed and we advise investors to shun companies which have charted hefty gains recently or have poor financial results," said Li Feng, a China Galaxy Securities Co analyst.

"Attention should be paid to lower-value blue chips in such sectors as petrochemical, fertilizer, coal, non-ferrous metal, electricity, property and banking."

Large-cap quality companies fared better than the rest of the market in the past week. The SSE 50 index, which covers the top 50 Shanghai-listed firms by market value, fell 1.22 percent for the five sessions.

"The lackluster performance on Friday (a 2.65 percent drop) reflected investors' worries that more policies may be unveiled over the weekend to further cool the market," said Liu Yu, an Orient Securities Co trader.

"If there are no concrete austerity measures in coming days, the index will likely inch up in a steady manner but any sudden jump is not likely."

Beijing Shoufang Consulting Co expects the index to move between 3,900 and 4,280 this week..

The consultancy also advised investors to focus on blue chips in the banking and steel industries for their rosy profit outlook.