Stocks extend gains as regulatory concerns recede

Chinese mainland stocks extended gains into a second day on Wednesday, as renewed optimism about the US economy and easing concerns about China’s regulatory tightening lifted sentiment in global equity markets.

The blue- chip CSI 300 Index rose 0.12 percent to 3,445.18 points.

The benchmark Shanghai Composite Index added 0.20 percent to 3,140.85 points, while the Shenzhen Component Index closed 0.39 percent higher at 10,204.84 points.

Risk appetite improved as Asian stocks extended gains for a fifth consecutive day following a strong finish to US markets on Tuesday.

“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,” Chi Lo, economist at BNP Paribas Investment Partners, wrote Wednesday.

But there were signs investors were taking profits on some stocks, including liquor maker Kweichow Moutai and home appliance maker Gree Electric Appliances, which backed away from their record highs.

On the other hand, stocks expected to benefit from the newly launched Xiongan new economic zone, in North China’s Hebei Province, again rebounded, with more than 10 Xiongan “concept” stocks surging by the maximum allowed 10 percent.

Sector performance was mixed, while the tech- heavy start- up board ChiNext still hovered near its lowest in 1.5 years, reflecting sustained weakness in small caps.

In Hong Kong, financials led the market higher as fund managers bet on expectations the quality of banks’ balance sheets will likely get better on an improving economic cycle.