SHANGHAI, April 27 (Reuters) - China stocks reversed earlier losses to end up on Thursday, as a strong rebound in small-caps lifted sentiment amid lingering concerns about economic growth and tighter regulations.
The blue-chip CSI300 index rose 0.1 percent to 3,446.72 points, while the Shanghai Composite Index added 0.4 percent to 3,152.19 points.
The two indexes plumbed more than two-month lows in early morning trade.
Profits earned by China's industrial firms rose 23.8 percent in March from a year earlier, still robust but slowing from multi-year highs seen in previous months.
Thursday's data also suggested some firms further up the manufacturing chain were having trouble passing higher input costs to buyers, pressuring profit margins.
That reinforced concerns that China's economy could have peaked in the first quarter and may slow during the rest of the year.
"We remain very cautious about the market for the moment, as regulators continue to tighten their grip in deleveraging efforts," said Yang Weixiao, an analyst with Founder Securities.
"The regulatory crackdown on the banking system to contain risks will also draw liquidity out of the stock market," Yang added.
President Xi Jinping called on Tuesday for increased efforts to ward off systemic risks to help maintain financial security, the official Xinhua news agency said.
"The policy response demonstrates the authorities' intention to ensure that financial system de-leveraging doesn't lead to financial instability," Tim Condon, head of Asia research at ING, said in a note.
"But it will make 2017 a difficult year to make money in Chinese financial markets, in our view. On the positive side, lower China macro risk is positive for risk assets globally."
Most sectors gained ground, while property shares dragged the most, posting their worst day in four months.
Home prices in China's biggest cities would likely rebound if government curbs are relaxed, a senior official from the country's top economic planner was quoted as saying, suggesting authorities are in no mood to lift restrictions any time soon.
Small-caps outperformed the broader market, after a recent slump amid increased regulation, with the tech-heavy start-up board ChiNext bouncing 1.2 percent to 1,842.9 points. (Reporting by Luoyan Liu and John Ruwitch; Editing by Jacqueline Wong)