China's blue-chips firm on upbeat industrial profit data

China's blue-chip stocks on Monday retreated from steep losses in the previous week, as foreign investors looked for bargains after upbeat industrial profit data showed signs of recovery in the world's second-largest economy.

** The blue-chip CSI300 index rose 0.3 per cent, to 3,900.33 points, while the Shanghai Composite Index closed down 0.7 per cent to 3,062.50 points. ** Both indexes on Friday posted their worst weekly drop in 28 on policy support worries.

** Profit at China's industrial firms grew in March, rebounding from four months of contraction, adding to optimism the world's second-largest economy may be starting to stabilise. ** China's factory activity likely expanded at a steady but modest clip in April, marking the second straight month of improving business conditions, as government growth-boosting measures buoy the vast manufacturing sector.

** That the PBOC could temper the pace of its policy easing amid dovish stance of other global central banks, means it does not resort to flood-like stimulus and China's economic performance is relatively better, Haitong Securities said in a report. ** From a medium- to long-term perspective, there are no signs of a bubble in the overall valuations of A-shares market, and extensive medium- and long-term money will continue to flow into the A-shares market as China's economy gradually bottoms out, Wanlian Securities wrote in a note.

** It is hard for China's monetary policy to take a sharp turn, as the downward pressure remains for the country's economic growth, the brokerage added. ** All eyes were on the development of the Sino-U.S. trade negotiations.

** U.S. negotiators head to China on Tuesday to try to hammer out details to end the two countries' trade war, including the shape of an enforcement mechanism, the success or failure of which could set the trajectory of ties for years to come. ** Gains were led by blue-chips, with the Shanghai SE50 index, an index tracking the 50 largest companies listed in Shanghai, ending up 1.6 per cent, as investors cheered solid earnings at those sector leaders.

** There were also signs of bargain hunting, as investors on Monday via the Stock Connect programme linking mainland and Hong Kong bought a total of about 5 billion yuan of A-shares, according to Refinitiv data. ** Around the region, MSCI's Asia ex-Japan stock index was firmer by 0.55 per cent.

** At 07:14 GMT, the yuan quoted at 6.7288 per U.S. dollar, 0.02 per cent firmer than the previous close of 6.73. ** So far this year, the Shanghai stock index has risen 22.8 per cent and the CSI300 gained 29.6 per cent, while China's H-share index listed in Hong Kong is up 14.9 per cent. Shanghai stocks have declined 0.91 per cent this month. As of 07:15 GMT, China's A-shares were trading at a premium of 24.76 per cent over the Hong Kong-listed H-shares.