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Stock rally shows confidence in economy: regulator

2015-03-21 08:34 Xinhua Web Editor: Li Yan

A Chinese stock regulator said Friday that rising Chinese shares in recent weeks show improving confidence in economic growth.

The rally reflected progressing reform, sufficient liquidity, lowered funding costs and better performance of small and medium-sized enterprises, said Deng Ke, spokesperson of the China Securities Regulatory Commission (CSRC).

Deng described the rise as "reasonable and certain."

China's two major stock indices, the benchmark Shanghai Composite Index and the Shenzhen Component Index, have climbed around 10 percent and 30 percent respectively from the beginning of the year, with most of the companies on a gaining streak.

The Shanghai index consolidated near a seven-year high on Friday, marking a rare eight-day rally.

Bucking the previous heavyweight-led rise at the end of last year, small-cap stocks posted better performance than blue chips in the period, statistics showed.

A steady and healthy stock market will be important to boost confidence, expand direct financing and accelerate economic restructuring, Deng said.

But he said investors still need to pay attention to risks and should not blindly follow the trend given the economic downward pressure.

The CSRC will continue to strengthen supervision and act hard on market manipulation, Deng added.

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