SHANGHAI stocks may not extend Friday's strong finish this week as no strong incentives are expected to be unveiled by the central government.

The Shanghai Composite Index closed on Friday 1.3 percent higher at 2,404.74, but for the week it fell 1.4 percent - the biggest fall since January.

Xu Yiding, an analyst at China Minzu Securities Co, sees no strong incentives this week which may act as a catalyst for the market to rally.

Premier Wen Jiabao said on Wednesday that China won't ease its curbs on housing, and will stick to a prudent monetary stance. Shanghai stocks sank 2.63 percent on Wednesday, the worst since December 2011.

"The premier's remarks, while confirming no loosening of the existing property policies, also suggest there will be no further strengthening of the curbs in the near term," Xu said.