There's not much in the way of New Year cheer for China's beleaguered stock market as it braces for the resumption of new listings that could dent demand for existing shares.
Still, the lifting of the freeze on initial public offerings (IPO) could boost sentiment and once markets have digested the new supply, focus should turn to the positive factors for the benchmark Shanghai Composite, analysts say.
(Read more: China approves new IPOs, ending listing freeze)
China has approved six more companies to list on stock exchanges on the mainland in the second batch to receive approval since regulators ended a year-long freeze on IPOs just over a month ago, state media reported on Thursday. Earlier this week, China approved the listing of five firms.
(Read more: China shares tumble on plans to lift IPO freeze)
Tai Hui, chief market strategist, Asia at J.P. Morgan Funds, said new rules governing the new listings should help boost sentiment in the stock market. In recent years, Chinese firms have been dogged by a number of accounting scandals.
"I think definitely it will give people some confidence about investing in IPOs," Hui told CNBC.
Analysts said they expected financial stocks to gain from the lifting of the IPO freeze since banks should gain from fee income related to new stock market listings.