China, Hong Kong stocks surge at open on Beijing's stimulus promise

China and Hong Kong stocks surged at open on Tuesday after top policymakers vowed to ramp up policy stimulus to spur growth. The blue-chip CSI300 index rallied 3.2 per cent at open, while the Shanghai Composite index added 2.6 per cent.

 

Hong Kong's benchmark Hang Seng jumped 3.2 per cent at open, adding to Monday's 2.8 per cent gain. The tech index surged 4.2 per cent. Next year, China will adopt an "appropriately loose" monetary policy, the first easing of its stance in some 14 years, alongside a more proactive fiscal policy to spur economic growth, state media Xinhua reported after-market on Monday, citing a readout of a meeting of top Communist Party officials, the Politburo.

 

Authorities will also step up "unconventional" counter-cyclical adjustments, focusing on expanding domestic demand and boosting consumption, the report added.

 

"The strong tone on policy stance suggests that Beijing is very determined to stabilise growth and will step up fiscal spending next year," Nomura economists said.

 

For 2025, Beijing may stick to "around 5.0 per cent" GDP growth target and raise the fiscal deficit to GDP ratio to 4.0 per cent from 3.0 per cent in 2024, they added.

 

Investors will now turn their focus to this week's Central Economic Work Conference, where key targets and policy directions will be set for the next year.