Staff reporter and agencies
Hong Kong stocks surged 795 points to a nearly 14-month high and the yuan extended its rise to a fresh 16-month high yesterday, driven by news of more aggressive economic stimuli from China.
The Hang Seng Index rose 4.2 percent to 19,924 points, with turnover on the main board soaring to HK$302.87 billion, the highest in over two and a half years. The Shanghai Composite Index climbed 3.1 percent above the 3,000 level.
This came after China's leaders pledged to support the struggling economy through "forceful" interest rate cuts and adjustments to fiscal and monetary policies in a Politburo meeting yesterday, as well as reports on China's plan to inject 1 trillion yuan (HK$1.11 trillion) into biggest state banks and a proposal to issue special sovereign bonds worth 2 trillion yuan.
The tech gauge in the city rallied 7.3 percent, with Alibaba (9988) advancing 7.1 percent and JD.com (9618) adding 10.1 percent. Tencent (0700) jumped 6.1 percent.
Mainland developers also saw a gain, with Longfor (0960) surging 28.3 percent, the best performers among blue chips, after officials called for measures to stop property market decline. China Resources Land (1109) was up 21.5 percent.
Consumer stocks also rose after Shanghai said it planned 500 million yuan worth of coupons to boost consumption, with Li Ning (2331) up 15 percent.
"HK and Chinese onshore stocks shot up immediately after the Politburo readout, showing that investors don't want to miss the chance to chase the China rally with stocks trading at a multi-year low levels and you have the biggest stimulus package announced in years," said Dickie Wong, executive director of research at Kingston Securities.
In money markets, the onshore yuan rose for a third consecutive day to close at 7.02 against the US dollar, hitting a new 16-month high.
China's stimulus package also lifted the sentiment in other Asian markets, with Japan's benchmark Nikkei 225 stock average up 2.8 percent.
Elsewhere, spot gold rose 0.4 percent to US$2,668 (HK$20,754) an ounce, having scaled a record high on Wednesday.
Central banks were in focus too, and the Swiss National Bank cut rates by 25 basis points yesterday, choosing not to go for a larger 50-basis point move that markets had seen as a possibility.
It was the SNB's third such move this year.
The HSI rose nearly 800 points. Sing Tao
