* SSEC +0.4 pct, CSI300 +0.5 pct, HSI +0.9 pct
* China's draft securities law to tighten regulation
* MSCI World index hits record high overnight
SHANGHAI, April 25 China stocks rebounded on
Tuesday morning following the previous session's sharp sell-off,
with a jump in consumer stocks providing fresh evidence of
investors rotating out of growth shares into defensive plays.
Hong Kong shares also rose, following euphoria in global
equities triggered by the market-friendly outcome of the first
round of the French presidential election that sharply reduced
expectations of a Brexit-like result in the second round of the
poll in May.
China's blue-chip CSI300 index rose 0.5 percent,
to 3,447.10 points by the lunch break, while the Shanghai
Composite Index gained 0.4 percent to 3,142.67 points.
Yang Hai, strategist at Kaiyuan Securities, described the
rebound, which came after the market's over 1 percent drop on
Monday - the biggest percentage loss for the year - as
"technical" in nature.
"The market bounced after being over-sold," Yang said,
attributing the recent weakness to regulatory tightening.
"The regulatory crackdown on shadow banking is targeting
mainly the banking system, not the stock market, but equities
have been implicated."
Analysts also cited the heavy-handed crackdown on
speculation by top securities regulator Liu Shiyu, who is
guiding money into cash-rich blue-chips.
Underlining the tightening regulatory environment, the
official Xinhua News Agency said late on Monday that the new
draft of China's securities law would tighten rules preventing
insider trading and better protect the interests of investors.
Most sectors gained on Monday, with consumer stocks
outperforming the broader market with a 2.3 percent
rise, continuing the recent trend.
An index tracking liquor makers jumped 2.7
percent, as Kweichow Moutai Co, which produces the
Chinese alcoholic drink baijiu, flirted with record highs,
jumping 4.3 percent.
In Hong Kong, the Hang Seng index added 0.9 percent
to 24,366.98 points, while the Hong Kong China Enterprises Index
gained 1.3 percent, to 10,240.64.
Overnight, the MSCI World index surged 1.6
percent to an all-time high, as French stocks jumped over 4
Wall Street gained over 1 percent, as the market priced in
expectations that Emmanuel Macron, an internationalist, would
likely defeat anti-euro nationalist Marine Le Pen in the second
round of the French presidential election in two weeks.
(Samuel Shen and John Ruwitch; Editing by Sam Holmes)