China stocks post strong gains despite warning against "irrational exuberance"
SHANGHAI, April 21 (Reuters) - China stocks jumped on Tuesday as bullish investors piled into small-cap stocks, betting on further gains despite stretched valuations and a warning from official Xinhua News Agency against "irrational exuberance."
The CSI300 index of the largest listed companies in Shanghai and Shenzhen rose 2.2 percent to 4,619.16 points, while the Shanghai Composite Index gained 1.8 percent to 4,293.62 points.
Shenzhen's Nasdaq-style start-up board ChiNext surged over 5 percent.
"China's economic restructuring needs support from a healthy capital market, but such support should be in the form of a slow and long bull (market), based on improvement in corporate earnings," a Xinhua article said.
Trading on the Shanghai Stock Exchange surpassed 1 trillion yuan ($161.30 billion) for the first time on Monday, as China's stock trading fever made the bourse the world's biggest in terms of turnover, surpassing the New York Stock Exchange.
Brokerage shares were among market leaders on Tuesday as investors bet the industry will benefit from surging trading.
Liquor makers also jumped on signs that the sector, which has been hit by President Xi Jinping's anti-extravagance campaign, is bottoming out.
Kweichow Moutai rose by its 10 percent daily limit after reporting an 18 percent jump in first-quarter net profit, its fastest quarterly growth since 2013.
The gains helped push the CSI Food and Beverage Subindex up nearly 6 percent. ($1 = 6.1998 Chinese yuan) (Reporting by Samuel Shen and Pete Sweeney; Editing by Kim Coghill)
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