China's Market Surges on Massive Stimulus Push

China and Hong Kong stocks witnessed their biggest weekly jumps in decades as Beijing unveiled its most aggressive stimulus package ahead of the Golden Week holidays. Major stock indices saw significant gains, and China announced various measures, including cutting reserve requirements and easing restrictions on home purchases, to bolster the economy.

In a remarkable financial week, China and Hong Kong stock markets soared to their highest weekly gains since 2008 and 1998, respectively, driven by Beijing's aggressive stimulus package ahead of the Golden Week holidays.

The blue-chip CSI300 and Shanghai Composite indexes surged approximately 16% and 13%, respectively. Meanwhile, Hong Kong's Hang Seng index gained 13%. According to Barclays analysts, the measures indicate a critical shift in policy urgency, showing that authorities are committed to more than just minimal actions.

Significantly, the People's Bank of China announced a 50 basis points cut to the reserve requirement ratio for all banks and reduced the borrowing cost for seven-day reverse repurchase agreements by 20 basis points. This move aims to stabilize an ailing economy. Data also revealed that industrial profits severely contracted in August.

On the property front, shares rose over 8% following a Politburo pledge to stabilize the housing market. Shanghai and Shenzhen are reportedly planning to lift key home purchase restrictions, boosting real estate values. In the consumer sector, staple shares increased by 7.5%, and major tech stocks in Hong Kong, like JD.com and Meituan, surged over 8%.

As the markets rallied, technical issues hampered some investors on the Shanghai Stock Exchange. Additionally, China plans to issue special sovereign bonds worth about 2 trillion yuan this year to support fresh fiscal stimulus.

(With inputs from agencies.)