Chinese investors are eagerly anticipating further policy guidance from China’s leading economic planning authority as mainland markets resume trading following a week-long holiday.
A group of high-ranking officials from the National Development and Reform Commission, led by chairman Zheng Shanjie, is scheduled to update the media on the progress of stimulus policies at a press briefing on Tuesday at 10 a.m. local time. This announcement was made in a statement issued by the State Council on Sunday.
Market experts and participants are closely monitoring for potential additional policy interventions, as Beijing demonstrates a sense of urgency in steering the economy towards achieving the annual growth target of “around 5%.”
Leading up to the holiday period, authorities unveiled a series of stimulus measures such as interest rate cuts, reduced cash reserve requirements for banks, relaxed property purchase regulations, and liquidity injections to support the stock markets.
Amid these developments, major Chinese stock indexes have rallied more than 25% as investors react positively to the wave of stimulus initiatives. Last week, the CSI 300 blue-chip index in China extended its winning streak for nine consecutive days, soaring over 8% on Monday before the market pause for the holiday period.
On the other hand, Hong Kong stocks resumed trading last Wednesday and on Monday breached the 23,000 mark for the first time since 2022.
Futures contracts linked to the MSCI China A50 Connect Index, which monitors 50 mega-cap stocks in the A-share market, increased nearly 15% since September 30, reaching 2,536.6 by 2:30 p.m. on Monday. Similarly, SGX FTSE China A50 Index futures also experienced a substantial 12.7% increase to 15,672 over the same holiday duration.
Notably, Pierre Lau, China equity strategist at Citigroup, expressed optimism regarding the current market conditions. Lau predicted that Beijing is likely to introduce more significant economic stimulus measures than what the market anticipates, projecting a forthcoming 3 trillion yuan (US$427.5 billion) consumption support package.
Citigroup has adjusted its targets, raising the Hang Seng Index goal by 24% to 26,000 by mid-2025, while also elevating the MSCI China Index target by 27% to 84 within the same timeframe.
