China's $5.3 Trillion Stimulus Sparks 16% Stock Rally, Eases Property Market

Sep 30, 2024, 02:23 AM

China has introduced a series of extensive stimulus measures aimed at revitalizing its economy and boosting the struggling property sector. The People's Bank of China and the National Financial Regulatory Administration have rolled out policies to lower mortgage rates for first and second homes by 30 basis points, effective by the end of October. Major cities such as Shanghai, Guangzhou, and Shenzhen have eased homebuying restrictions, allowing more flexibility for both residents and non-residents. These measures have led to a significant rally in Chinese stocks, with the Shanghai Composite Index rising by over 6% and the ChiNext Index jumping 11.41%. Trading turnover in Chinese stock markets reached record highs, surpassing 1 trillion yuan in just 30 minutes after opening. The CSI 300 Index experienced its biggest weekly gain in nearly 16 years, driven by these policy changes. The stimulus package, often referred to as a 'bazooka' stimulus, includes measures affecting $5.3 trillion in loans and has resulted in a 16% rise in Chinese stocks over the past week, pushing them into a bull market.