Tech Stocks Propel China's Market Amid Bold IT Support Measures

China's stock market saw gains on Monday, driven by surging tech shares as Beijing announced support for the information technology sector and cut benchmark lending rates. The tech-heavy indices led the rise, bolstered by President Xi Jinping's favorable comments on science and technology's role in economic development.

On Monday, China's stock market experienced significant growth, sparked by a rally in tech shares following Beijing's announcement of new measures to bolster the information technology sector. In a calculated move, the country announced cuts to benchmark lending rates.

The blue-chip CSI300 Index climbed 0.9% by midday, while the Shanghai Composite Index increased by 0.8%. The tech-heavy STAR50 Index surged by 6.8%, showcasing strong investor interest. Despite these gains, the Hang Seng Index in Hong Kong saw a slight decline of 0.6%, dragged down by financial stocks.

This market optimism is partly credited to President Xi Jinping's endorsements of science and technology as pivotal to economic growth. In further policy updates, the People's Bank of China inaugurated a $42 billion funding initiative. These developments have influenced UBS analysts to upgrade GDP growth forecasts for 2024 and 2025.

(With inputs from agencies.)