Stocks advance on strength in banking shares

Chinese mainland stocks ended higher on Tuesday, with consumer and financial shares lending support as investors pondered the impact of new regulations on IPOs and ahead of a flurry of economic data.

The blue- chip CSI 300 Index rose 0.70 percent to 3,492.88 points.

The benchmark Shanghai Composite Index gained 0.34 percent to 3,102.13 points, while the Shenzhen Component Index closed 0.74 percent higher at 9,915.92 points.

ChiNext, the country’s NASDAQ- style board, closed 0.29 percent higher at 1,766.39 points.

It is likely that China’s economy remained on stable footing in May, buoyed by solid gains in trade and investment as economic ties with the US take a positive turn and infrastructure spending cushions domestic growth.

A Reuters poll of indicators from trade and industrial output to loans and property investment is expected to show that economic growth held up nicely into the second quarter, defying worries of a sharp slowdown.

However, sentiment was dampened after State media reported that the securities regulator would maintain a stable and firm policy regarding new listings, raising concerns among investors that the pace of IPOs would not be curtailed as expected.

“Currently, valuations of many listed companies are still quite high, in particular small caps,” said Zhang Qi, an analyst with Haitong Securities.

Expectations of more equity supply could weigh on those small- cap stocks, according to many analysts Reuters spoke to.

Most sectors gained ground, with consumer stocks leading the gains.