(From Reuters)

China stocks jumped nearly 3 percent on Monday morning, with investors encouraged by a regulator’s assurance that it was premature to consider withdrawing government bailout funds from the market, and comments that dispelled fears of a flood of initial public offerings.

China’s blue-chip CSI 300 index rose 2.7 percent, to 3,098.16 points by lunch break, while the Shanghai Composite Index gained 2.6 percent, to 2,882.76 points.

Hong Kong shares also started the week on a solid footing, tracking a rally in global markets as oil prices climbed further.

Sentiment was helped by comments on Saturday from Liu Shiyu, the newly installed chairman of the China Securities Regulatory Commission (CSRC).’

Liu told reporters that China’s shift toward a registration system for initial public offerings (IPOs) would “take a relatively long time”, and “it’s too early to talk about” the exit of government bailout funds.

Liu’s remarks emboldened investors, who had feared that an imminent IPO reform would flood the market with newly-issued shares while an exit of state-backed investors would increase selling pressure.

These two factors had “previously haunted the market,” said Li Yinghua, chief strategist of Shenzhen Spruces Capital Management Co. “The market is strong today because Liu’s remarks removed the uncertainties.”

Some investors also took heart at glimmers of strength in China’s weekend data, which showed a solid 10.2 percent growth in fixed-asset investment during the first two months of the year, despite continuing weakness in other key parts of the economy. Read more

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