Stocks surge in US$592 billion rally as investors ‘gobble up’ China’s stimulus package

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The market lost some momentum in the afternoon with the realisation that fundamentals may not support a sustainable rally, analysts said

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A bronze sculpture of a bull stands near the headquarters of Hong Kong’s bourse operator in Exchange Square in Central. Photo: Dickson Lee

Jiaxing Li

Published: 10:37am, 25 Sep 2024Updated: 5:05pm, 25 Sep 2024

Hong Kong and mainland stocks extended a stellar rebound as traders continued to cheer on Beijing’s fresh stimulus injection.

The Hang Seng Index closed up 0.7 per cent at 19,129.10 on Wednesday, a four-month high, after jumping as much as 3.1 per cent earlier in the day. The Tech Index added 0.2 per cent. A gauge tracking the biggest mainland companies advanced 1.5 per cent following its biggest single-day jump since 2020.

Among market heavyweights in Hong Kong, Tencent Holdings jumped 1.4 per cent to HK$408, e-commerce operator JD.com gained 1.5 per cent to HK$126.50 and insurer AIA advanced 0.9 per cent to HK$60.20.

On the mainland, EV maker BYD rallied 3.4 per cent to 262.80 yuan, distiller Kweichow Mao-tai jumped 1.9 per cent to 1,399 yuan and battery maker CATL surged 2.8 per cent to 203.10 yuan.

A slew of stimulus measures by the People’s Bank of China to prop up the world’s second-largest economy, including a US$114 billion stock market rescue plan, policy rate cuts and reserve-ratio reductions, have convinced more investors that Beijing is serious about tackling the slump.

In another boost to the market, the central bank on Wednesday lowered the one-year medium-term lending facility (MLF) – the interest for one-year loans to financial institutions – to 2 per cent from 2.3 per cent.