China stocks rose for a fifth straight session on Monday, led by resources shares and small-caps, after a flurry of reassurances by the country's top leaders that the economy would stay on a sound footing despite strains from major structural reforms. The bluechip CSI300 index rose 0.4 percent, to 3,104.84, while the Shanghai Composite Index gained 0.8 percent, to 2,897.34 points.
The opening of China's annual parliament meeting in Beijing at the weekend delivered few surprises to investors, but was peppered by comments from officials seeking to calm worries about the slowing economy and the threat of large-scale Chinese layoffs amid industrial restructuring. China's technology-focused board ChiNext jumped 2.5 percent on Monday, offsetting weakness in the banking and property sector, after Beijing laid out its vision to become a tech power.
"Hong Kong has priced in a lot of bad news, yet Shanghai less so. But in short-term trading, moods matter more than reality," wrote Hong Hao, managing director of research at BOCOM International. "With a strong rebound in commodities, the mood is shifting, and will likely stretch the rebound - till the reality of falling growth sets back in."
The opening of China's annual parliament meeting in Beijing at the weekend delivered few surprises to investors, but was peppered by comments from leading officials seeking to calm worries about the slowing economy, the threat of large-scale layoffs amid industrial restructuring and record declines in the country's foreign exchange reserves. Beijing has set a growth target of 6.5 percent to 7 percent for this year, which Reuters had reported earlier. Its fiscal deficit target of 3 percent of GDP was lower than many had anticipated, although it is up from the previous year's goal of 2.3 percent.
However, investors now see little risk of a drastic slowdown in growth, after China's top economic planner said on Sunday that the economy will "absolutely not" experience hard landing. In addition, expectations are rising that planned reforms in the initial public offering (IPO) system could be delayed. The market had feared that the reform could start as early as this month, threatening to boost share supply.
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