BEIJING - A range of new rules effective this month has invigorated China's stock market in the first two trading days. The reform stimulus, however, will not guarantee the boom in the mid- and long- term, analysts said.

China's stock bourses in Shanghai and Shenzhen rose on May 2 and 3, the first two trading days after the two exchanges said they would slash transaction fees and allow companies with poor performance in the ChiNext market, a board for start-up firms to delist to protect investors' interests.

While the benchmark index and scores of stock sections rallied as they were buoyed by the reform news, ST (Special Treatment) companies, declined 2.89 percent and 0.45 percent on Wednesday and Thursday, with a majority of them falling by their daily limits.

ST stocks are shares in companies that have failed to earn profits for two years running or have been reported for false accounting. They have often been favored by speculative investors because of their capacity for sharp gains.

This is the first time the delisting rule has been introduced in China's stock market. Listed companies have seldom been ousted from the market unless involved in serious trading scandals, which leaves room for hostile profit-taking and speculations.

Dong Dengxin, a financial and securities researcher with Wuhan University of Science and Technology, said the move would have a massive impact on ST stocks. Therefore, the ChiNext market's value would invariably contract.

The exchanges' new moves -- combined with the latest guideline released by the nation's securities regulator, which states that a reform on the initial public offering system is under way -- have sent a strong signal that the regulator is serious in addressing those problems.

Li Xunlei, chief economist with Haitong Securities, noted the current rules in China's stock market focus more on ensuring listed companies' rights to raise funds, but pay less attention to protecting investor interests. The unfairly designed system is partly to blame for the recessive market, Li observed.

"In the short-term, the stimulus reform will absolutely boost the market," he said.

While the short-term outlook is guaranteed, analysts noted the market's longer-term prospects rest on economic fundamentals, not stimulus measures.

According to listed companies' annual reports in 2011 and quarterly reports in Q1 of 2012, their net profits totaled 1.94 trillion yuan ($307.94 billion), an increase of 11.58 percent from the same period a year ago, the slowest in the past three years.

Although reforms would help standardize the market and make it more mature, it is listed companies' profitability and the macro-economic outlook that will decide the prospects of the stock market, according to Li.

China's Purchasing Managers Index (PMI), a preliminary readout of manufacturing activities, rose in April for the fifth consecutive month,  indicating the economy is on a path of steady growth.

But the index compiled by HSBC Holdings remained below the boom-and-bust line of 50.

Fang Yiyu, an analyst with Huabao Securities, said the contradicting PMI data betrays the ambiguity of the current economic picture. Facing such complexity, the stock market's future remains uncertain.