China stocks gain as mainland economy fears ease

Shanghai: China stocks extended gains for a second day on Wednesday, as renewed optimism about the US economy and easing concerns about regulatory tightening on the mainland lifted sentiment in global equity markets.
The blue-chip CSI300 index rose 0.1 per cent to 3,445.18 points, while the Shanghai Composite Index added 0.2 per cent to 3,140.85 points.
Risk appetite improved as Asian stocks extended gains for a fifth consecutive day following a strong finish to US markets on Tuesday.
The Nasdaq Composite hit a record high, while the Dow and S&P 500 brushed against recent peaks as strong earnings underscored the health of corporate America.
A rebound in China stocks has also been aided by perception in some quarters that fears of Beijing's deleveraging campaign, which had knocked down share prices to three-month lows, were overdone.
"China's deleveraging can only go gradually," Chi Lo, economist at BNP Paribas Investment Partners wrote in a report on Wednesday.
"Barring any renewed growth weakness, selective small monetary tightening, amid a broad neutral monetary stance, will remain as a tool to slow the pace of leveraging and set the stage of eventual deleveraging."
Confirming such a monetary stance, China's politburo, a top decision-making body of the ruling Communist Party, said late on Tuesday that China will maintain proactive fiscal policy and prudent monetary policy, according to the official Xinhua news agency.
But there were signs investors were taking profits in China's "nifty 50" stocks, including liquor maker Kweichow Moutai and home appliance maker Gree Electric Appliances, which eased from their record highs.
On the other hand, stocks expected to benefit from the newly-launched Xiongan New Economic Zone continued to rebound sharply, with over 10 Xiongan "concept" stock surging the maximum allowed 10 percent.
Sector performance was mixed, while the tech-heavy start-up board ChiNext still hovered near its lowest in one and a half years, reflecting sustained weakness in small-caps.