Written by Cláudio Afonso | LinkedIn | X
Chinese stocks rallied sharply on Monday following a Politburo meeting that introduced robust fiscal and monetary strategies aimed at strengthening the nation’s economy.
The Politburo, consisting of the Communist Party’s top 24 officials and chaired by President Xi Jinping, unveiled plans to pursue a more proactive fiscal policy and adopt a moderately loose monetary stance for the year ahead. China aims to stimulate economic growth, stabilize markets, and mitigate key risks and external shocks that could impact its economic trajectory.
“The meeting emphasized the need to strengthen the Party’s leadership over economic work to ensure that the CPC Central Committee’s decisions and deployments are implemented effectively. It is necessary to fully mobilize enthusiasm from all sectors and activate the intrinsic motivation of cadres to work and innovate,” the statement reads.
Investors responded enthusiastically to the meeting’s declarations, resulting in significant gains across major indices. The Hang Seng Index climbed 2.8%, while the Hang Seng Tech Index surged by 4.3%.
In the electric vehicle (EV) sector, LeapMotor led the charge with a 6.3% rise, followed by XPeng with 4.8% and Nio which closed 5.25% higher. The NEV maker Li Auto surged 4.1%.
In September, the People’s Bank of China (PBOC) announced several stronger-than-expected key measures to stimulate the economy and support liquidity marking the strongest stimulus since the Covid-19 pandemic in 2020.
Pan Gongsheng, governor of the PBOC, said the central bank would set up a swap facility for securities, fund, and insurance firms allowing eligible institutions to access liquidity from the central bank by pledging assets.
Pan said the policy is expected to significantly improve these institutions’ ability to raise funds and increase their shareholdings.
Written by Cláudio Afonso | LinkedIn | X
