The Hang Seng Tech Index experienced a significant increase of over 7% on Friday, reaching 4,515 points, while marking a 22% rise for the week. In parallel, the Hang Seng Index also saw notable growth, rising by 3.81% on Friday and reaching a 13% increase for the week.
Meanwhile, China’s blue chip CSI300 saw its best week in 16 years with a jump of more than 3% on Friday, bringing the weekly rise to 15%.
These substantial market gains come on the heels of a series of stimulus packages implemented by the Chinese government to support economic growth and achieve its targeted growth rate of 5% for the year.
As part of these initiatives, the People’s Bank of China executed its second cut to the 7-day reverse repo rate, reducing it to 1.5% from 1.7%. The previous adjustment to the short-term rate was made in July when it was lowered from 1.8% to 1.7%.
In addition to the rate cut, the central bank also announced a 0.5 percentage point reduction in the reserve requirement ratio for financial institutions. This move is aimed at fostering a favorable monetary and financial environment to facilitate stable economic growth and promote high-quality development in China, as stated in a translated statement from the People’s Bank of China.
China’s government also announced it will offer a one-time cash allowance to those in extreme poverty, a day after its central bank rolled out a slate of stimulus measures aimed at shoring up the economy.
Following this reduction, the weighted average deposit reserve ratio of financial institutions is expected to settle at approximately 6.6%, indicating a strategic approach by the central bank to support and sustain economic stability and growth in the region.
