The Hang Seng Index rose 1.2 per cent to 20,650.82 as of 9.49am local time, extending a 2.8 per cent gain on Monday. The Hang Seng Tech Index gained 1 per cent. On the mainland, the CSI 300 Index climbed 1.9 per cent and the Shanghai Composite Index added 1.6 per cent.
Sentiment took a sudden turn for the better after a readout of a Politburo meeting chaired on Monday by President Xi Jinping said China would adopt more proactive fiscal policies and “moderately loose” monetary policies next year to boost domestic demand.
It was the first time that the Politburo used the phrase “moderately loose monetary policies” since 2010, when China was dealing with the aftermath of the global financial crisis. That compared with the “prudent monetary policies” phrase that top policymakers have been using over the past few years.
The readout leaves the door open for looser policies next year, ranging from more cuts in interest rates and a bigger deficit ratio. The Politburo meeting readout came just days before a central economic work conference that is expected to set the policy tone for next year.
