China's Bold Economic Moves Propel Market Rebound

China and Hong Kong stocks rebounded following a Reuters report about China's plans for a record budget deficit in 2025. Positive sentiment was further bolstered by Beijing's push for state-owned companies to enhance market value through various strategies. Most sectors saw gains, notably semiconductors.

China and Hong Kong stocks experienced a notable rebound following reports that China is planning a record budget deficit for 2025. The optimistic market response was further influenced by Beijing's directive, urging state-owned enterprises to raise their market value.

As of midday, the Shanghai Composite index showed an increase of 0.72%, while the blue-chip CSI300 index climbed 0.52%. In Hong Kong, the Chinese H-share index, Hang Seng China Enterprises Index, rose by 0.86%, and the Hang Seng Index improved by 0.58%.

This rally was fueled by guidance from the State-owned Assets Supervision and Administration Commission, which recommended strategies for enhancing listed companies' market values. Adding to this momentum, a Reuters report disclosed that Chinese leaders may increase the budget deficit to 4% of GDP in 2025, aiming for a 5% economic growth target.

(With inputs from agencies.)