* SSEC +0.4 pct, CSI300 +0.4 pct, HSI +0.6 pct
* Asian stocks rise for 5th day after Wall Street strength
* China's deleveraging can only go gradually - BNP Paribas
SHANGHAI, April 26 China stocks rose on
Wednesday, continuing their recovery from recent declines, as
renewed optimism about the U.S. economy and easing concerns
about regulatory tightening on the mainland lifted sentiment in
global equity markets.
Both China's blue-chip CSI300 index and the
Shanghai Composite Index gained 0.4 percent by the lunch
break, to 3,453.69 points and 3,145.71 points, respectively,
their second straight day of gains.
Hong Kong benchmark Hang Seng index rose 0.6 percent
to 24,598.85 points, while the Hong Kong China Enterprises Index
gained 0.7 percent to 10,340.43. A break of the March 21
peak of 24,656.65 would set it at a 20 month high.
Risk appetite improved as Asian stocks extended gains for a
fifth consecutive day following a strong finish to the U.S.
The Nasdaq Composite hit a record high on Tuesday, 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
by some 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
"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
Chinese investors continue to pile into defensive sectors
while reducing holdings in growth stocks.
Utilities and consumer staple stocks rose, while the
start-up board ChiNext ended morning trading in
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 and
"We are carrying on the momentum from the overnight rally in
the U.S. markets and financials are in the spotlight on
expectations of good earnings," said Alex Wong, a fund manager
at Ample Capital Ltd in Hong Kong.
(Samuel Shen and John Ruwitch; Addition reporting by Saikat
Chatterjee; Editing by Sam Holmes)