China stocks edged up on Monday morning, but trading remained light, with the market’s bearish trend seen persisting as the government holds off on further policy stimulus.
Hong Kong shares also rose, following a solid session on Wall Street.
CSI300 index rose 0.3 percent, to 3,088.33 points by the lunch break, while the Shanghai Composite Index gained 0.5 percent, to 2,840.27 points.
The Shanghai index has fallen for five weeks in a row as investor enthusiasm waned on signs that China’s nascent economic recovery is losing steam and as policymakers turn more cautious over stimulus as corporate bad debts soar.
“People would use any rebounds to sell stocks, as the market is in a bearish trend, both technically, and fundamentally,” said Yu Bin, analyst at Zhongtai Securities.
“Pessimism has replaced optimism as the government has put restructuring, instead of stimulus or growth, at the centre of its policy-making.”
The market will also face some liquidity pressure next month as 232.4 billion yuan ($35.51 billion) worth of shares will come out of lock-up periods in June, up 12 percent from this month, according to the official Shanghai Securities News.
But most stocks rebounded on Monday, with healthcare being the only main sector that ended morning trade in negative territory.
In Hong Kong, the Hang Seng index added 0.3 percent, to 19,920.58 points, while the Hong Kong China Enterprises Index gained 0.7 percent, to 8,361.42.
Most sectors were firm, with IT shares leading the gains.