China stocks reverse course to close lower on profit-taking | Reuters

China stocks reversed earlier gains to end lower on Monday, as investors pocketed profits following a recent strong rally.

** The blue-chip CSI300 index closed down 1.1% at 5,077.24, while the Shanghai Composite Index declined 1% to 3,441.17.

** The retreat came after the blue-chip index gained 3.4% in the previous week, its best in more than two months.

** The tech-heavy start-up board ChiNext ended 0.8% lower on Monday, having gained 14% from a trough hit on March 25.

** Analysts said despite the recent rally, stocks could continue to be rangebound given the uncertainties around Sino-U.S. relations, liquidity and policies.

** “For now, investors should not expect a big rally, nor a big slump, going ahead in the A-share market, as Beijing would move to rein in market fluctuations to prevent risks,” said Zhang Chengyu, a Beijing-based hedge fund manager.

** Zhang said investors could train their eyes on small-cap firms with hot investment themes, as volatility in large-caps could decline.

** Caution also prevailed as market participants awaited the politburo meeting, the top decision-making body of China’s ruling Communist Party, for comments and guidance on policy deliberations.

** Ahead of the meeting at end-April, investors need to focus on the defensive side by sticking to stocks with solid growth and reasonable valuations, Shanghai Securities said in a report.

** Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.45%, while Japan’s Nikkei index closed up 0.36%.

** At 07:34 GMT, the yuan was quoted at 6.4894 per U.S. dollar, 0.11% firmer than the previous close of 6.4963.

** As of 07:35 GMT, China’s A-shares were trading at a premium of 33.61% over the Hong Kong-listed H-shares. (Reporting by Luoyan Liu and Andrew Galbraith; Editing by Subhranshu Sahu)

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