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The benchmark CSI 300 Index rose as much as 3.3% in early trade, while a gauge of Hong Kong-listed Chinese firms also extended gains following a 3.1% increase in the previous session.
Yields on China’s 10-year government bonds fell four basis points to 1.87%, a record low. The offshore yuan was little changed after gaining 0.2% against the dollar Monday.
The stock rally marked Chinese local markets’ first response to Beijing’s latest vow to use bolder stimulus for an ailing economy, catching up with Monday’s late rebound in Hong Kong and a surge in US-listed Chinese shares. Investors had been hoping for clearer and stronger support signals from authorities after a policy-driven rally lost steam in early October.
“The measures announced by Chinese policymakers at the Politburo have certainly struck a chord,” said Chris Weston, head of research at Pepperstone in Melbourne. ”The question that needs to be asked is whether these measures go anywhere near a ‘whatever it takes’ moment for China.”
The renewed optimism came after the Communist Party’s decision-making body pledged to embrace a “moderately loose” strategy for monetary policy in 2025, marking its first major shift in stance since 2011. The top leaders also said they will take a “more proactive” approach on fiscal policy, stabilizing property and stock markets, while promising to “forcefully lift consumption.”
Investors’ attention will now shift toward detailed policies expected from the country’s annual Central Economic Work Conference scheduled to begin on Wednesday.
