Chinese stocks rallied on Tuesday after the country’s leaders pledged to implement “moderately loose” monetary policy to revive economic growth. The CSI 300 index rose as much as 3.3 per cent at the open before paring gains to be 1.9 per cent higher. Hong Kong’s Hang Seng rose 1.1 per cent. Yields on China’s benchmark 10-year bonds slipped five basis points to 1.86 per cent in the morning session, hitting a record low as investors bet on further interest rate cuts from the central bank.
The leaders also vowed to “vigorously boost consumption”, a reference viewed by investors as a focus on demand-side policies. Dalian iron ore futures rose as much as 3.9 per cent during trading on Tuesday, their largest increase since September when Chinese officials unleashed a swath of stimulus measures. Demand for iron ore, a steelmaking commodity, is closely tied to China’s economic growth.