Mainland and Hong Kong blue chips yesterday capped off a stunning monthly advance that picked up steam as sharp improvements in corporate earnings and regional economic growth signalled the worst of the downturn may be over. Climbing for the fifth time in six sessions, the Shanghai Composite Index rose 90.502 points or 2.72 per cent to 3,412.062. It has increased every month this year and finished 15.3 per cent higher last month for its largest rally since August 2007. Hong Kong's benchmark also staged a strong performance last month, surging 11.94 per cent for its fifth consecutive monthly gain. The Hang Seng Index rose 339.25 points or 1.68 per cent to close at 20,573.33 yesterday. 'We can go further and extend the rally not only in Hong Kong but also in the A-share market,' said Linus Yip Sheung-chi, a strategist at First Shanghai Securities. 'Money is still chasing stocks and liquidity is one of the major driving forces, and some of the economic indicators are turning better [as well].' Investors loaded up on stocks last month after better than expected economic growth data across the border triggered a wave of brokerage upgrades on corporate earnings and equity markets. Adding to signs of an economic turnaround, US financial giants such as Goldman Sachs and JP Morgan announced multibillion-dollar earnings for the second quarter. Average daily turnover on the mainland exchanges this week hovered above 300 billion yuan (HK$340.29 billion) and peaked at an unprecedented 430 billion yuan on Wednesday amid the trading debut of China State Construction Engineering Corp. 'The enormous trading on the floor signified that we are probably closing in on the top of this round of the bull run,' said Zhang Gang, an analyst at Southwest Securities. '[And] the large influx of initial public offerings in the next fortnight could make a difference for the short-term market prospect.' Everbright Securities plans to offer shares for online subscription next Tuesday. And software vendor Accelink Technology and telecommunications equipment maker New Century will begin their flotations on August 10. Meanwhile, the mainland and Hong Kong markets were slammed on Wednesday by reports that Beijing might impose some tightening measures to cool off runaway markets. Any official announcement supporting the speculation would put the brakes on a recent rally, Mr Yip said. 'But if this weekend nothing happens, then buying interest will enlarge again,' he said, adding that the Hang Seng Index could climb as high as 23,000 points in the third quarter. Trading levels in Hong Kong picked up as last month progressed. Main-board turnover topped the HK$100 billion mark on Wednesday for just the fourth time this year. Regional markets also rose during the month, with South Korea jumping 12.03 per cent, Indonesia surging 14.63 per cent, Taiwan climbing 10.04 per cent and Japan rising 4 per cent.