China stocks rebound on stimulus expectation

Chinese shares rallied on Thursday, a day after market sentiment was hurt by a batch of lackluster economic figures, as expectation grew that more stimulus measures are on their way.

The benchmark Shanghai Composite Index surged 2.71 percent to finish at 4,194.82 points. The Shenzhen Component Index gained 2.35 percent to close at 13,967.8 points.

The ChiNext Index, tracking China's Nasdaq-style board of growth enterprises, rose 1.74 percent to end at 2,484.33 points.

Official data showed on Wednesday that China's GDP growth slowed to 7 percent in the first quarter of 2015, down from 7.3 percent in the fourth quarter, indicating mounting downward pressure.

Consumption, industrial output and investment remained sluggish in the Jan-March period. The key stock indices tumbled on Wednesday on the bad news.

"These weak figures fanned market expectation that more boosting measures will come soon," said Gao Xiang, chief wealth management advisor at CITIC Securities.

China cut interest rates twice and lowered bank reserve requirements in the past five months to inject liquidity into the market, and many financial institutions as well as ordinary investors have predicted that more monetary easing is on the cards.

Distilleries, ship builders and aircraft makers led the growth in Thursday's trading. Companies related to nuclear energy and oceanic engineering also enjoyed big gains.

Continued growth in the equity market since the fourth quarter of 2014 is prompting Chinese savers to put their money into stocks.

"Generally speaking, the prices of Chinese shares are low and robust capital inflow will likely keep stocks at a high level in the near future," said Gao.