China's shares closed almost two percent higher on Thursday after the Lunar New Year break, but worries over the spread of bird flu drove down chicken breeder Dajiang.
The benchmark Shanghai composite index, grouping hard currency B shares and yuan-denominated A shares, finished 1.78 percent higher at 1,628.837 points. Exchanges were closed from January 17 to 28.
During the break, Beijing announced economic growth of 9.1 percent for 2003, brightening market sentiment, analysts said.
"The appearance of bird-flu cases in some Chinese regions could not reverse overall bullishness," said analyst Chen Huiqin at Huatai Securities.
Analysts said the index was likely to test the psychologically crucial 1,650 level in one or two weeks.
China has halted the export of poultry products from bird flu-affected areas, including the Guangxi autonomous region and Hunan and Hubei provinces, state media said on Thursday.
It has also halted import of poultry from eight countries - South Korea, Japan, Vietnam, Cambodia, Thailand, Laos, Pakistan and Indonesia.
Dajiang Group Co Ltd saw its B shares fall their five percent daily limit to $0.22, but its A shares held steady at 4.81 yuan.
Exports make up 40 percent of its annual sales of about 500 million yuan ($60 million).
Dajiang, which has yet to unveil 2003 results, posted losses for 2001 and 2002. Its shares trade under special curbs that limit daily rises or falls to five percent, versus the usual 10.
But buying in large-capitalised, blue chip companies kept the market on track, brokers said.
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