Chinese stocks staged a rally Thursday despite Moody's downgrading of China's credit rating Wednesday, thanks to strong performance of blue-chip companies.
The benchmark Shanghai Composite Index increased 1.43 percent to end the day at 3,107.83 points. The smaller Shenzhen Component Index closed 0.83 percent higher at 9,893.78 points.
The ChiNext Index, China's NASDAQ-style board, ended 0.08 percent higher to close at 1,777.69 points.
Total turnover on the two bourses stood at 428.7 billion yuan (about 62.3 billion U.S. dollars).
More than 2,100 stocks gained across the two bourses, and financial shares were among the biggest winners of the day.
Guoyuan Securities rose by the daily limit of 10 percent to end at 11.99 yuan, and China Merchants Bank climbed 4.75 percent to close at 22.95 yuan.
In a statement released Wednesday, Moody's said it had downgraded China's long-term local currency and foreign currency issuer ratings to A1 from Aa3 and changed the outlook to stable from negative.
It attributed the move to expectations that China's economy-wide leverage would increase over the coming years, planned reform program would likely slow, but not prevent the rise in leverage, and sustained policy stimulus would cause rising debt.
Sun Binbin, chief analyst with TF Securities, believes the downgrade showed that Moody's "does not quite understand China's development pattern and path." He expects limited impact on the economy as the fundamentals are stable.
The Chinese economy roared back strongly in the beginning of 2017, with substantial rebounds in nearly all indicators.
Gross domestic product grew 6.9 percent in the first quarter, above the full-year target of 6.5 percent and the 6.8-percent growth in the fourth quarter of 2016. For the first four months, fiscal revenue, a gauge of the government's ability to conduct macroeconomic regulation, jumped 11.8 percent, compared to 8.6 percent the same period last year.
