According to the China Securities Regulatory Commission (CSRC), 3.42 million new accounts were opened in January and 1.27 million in February. The number of stock investors in China totaled almost 82 million at the end of February.

Analysts said the excessive liquidity had provided strong growth momentum for China's equity markets, which surged 130 percent in 2006.

China's share prices extended record gains on Tuesday as the key Shanghai Composite Index climbed 16.02 points, or 0.51 percent, to finish at 3,138.83 points.

The benchmark index has reported gains for seven days in a row despite concerns about overheating equity markets and expectations of more market fluctuations, like that of February 27, when the Shanghai Composite Index plunged 8.84 percent, the biggest single-day drop in a decade.

CSRC said the price to earnings (P/E) ratio of companies listed on the Shanghai A-share market had multiplied by 39.6 times from the level at the end of February, compared with 18 times in the same period last year.

US investment bank Goldman Sachs warned earlier that if the P/E ratio exceeded 25 times, share prices would be over-valued.

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