China's stock market hits record

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Chinese shares have continued rising at a breakneck pace, pushing Shanghai's main stock index through the 4,000 mark for the first time.

Shanghai's benchmark CSI 300 index closed up 2.6% at 4,090.57. It has doubled in value this year and quadrupled since the start of 2006.

Strong demand from domestic investors, many of whom are using savings to buy shares, is helping to underpin gains.

However, some analysts have warned that a stock market bubble is being created.

Last week, former Federal Reserve chairman Alan Greenspan warned that the Chinese stock market could undergo a dramatic correction.

'Still upwards'

Those words of caution have done little to dampen enthusiasm for stocks among Chinese investors.

"I think the basic trend of the stock market is still upwards," said Zhou Lin, an analyst at Huatai Securities.

One of the main factors behind the surge in shares has been a willingness among ordinary people, such as students and pensioners, as well as investors and businesspeople, to buy shares.

Instead of leaving their savings in bank accounts, many people are now using the cash to buy shares in the hope of receiving better returns.

According to industry figures, 300,000 people a day opened brokerage accounts in China last week.

Marshall Gittler, Deutsche Bank's chief Asian strategist, told the BBC's World Business Report that buying shares was the new Chinese national pastime.

However, he warned that many investors were not basing their purchases on solid financial analysis.

Mr Gittler warned that there would be a "substantial correction at some point".