Major indices that come under the influence of the Chinese government have seen a major boost in their prospects. On Tuesday, September 24, marquee indices rallied in green after China revealed its new set of fiscal stimulus to aid the Chinese economy that has been lost in the wilderness of sluggishness.
Two of the biggest indices, Hong Kong-based Hang Seng and Shanghai-based SSE Composite Index, made mammoth gains of over 3 per cent.
China's Fiscal Stimulus
In order to attain the government goal of 5 per cent growth, the authorities indicated the deployment of a handful of measures. As per reports, this includes cuts to the reserve requirement ratio or RRR. The RRR is the metric that regulates the amount of cash that bank can hold in reserve.
The move intends to induce long-term liquidity by supplying the fiscal oxygen of USD 141.7 billion.
The country also intends to lower the interest rates of existing mortgage loans. This is crucial, as China's real estate sector has long been its Achilles heel, reducing consumption power.
Hang Seng
When we look at the equity markets, the all-important Hang Seng made major gains on Tuesday. Hang Seng saw steady rise in its prospects. Post the lunch break, the surge only extended further.
At the time of writing, the marquee index rose by 3.66 pe rcent or 667.19 points. This took the overall value up to 18,914.30.
SSE Composite
When we come to mainland China, the SSE Composite Index also saw major jump of over 3 per cent. While the index started and continued on a stable progression in green, the post-lunch session unlocked greater potential.
At the time of writing, the index gained 3.67 per cent or 100.91 points. This took the overall figure of the SSE Composite Index to 2,849.83 points.
Taiwan Index Also Booms
Interestingly, the Taiwan-based index, TAIEX, was also trading in green. However, the gains were not that significant, especially when compared to the aforementioned indices. The TAIEX rose by 0.66 per cent or 146.25 points, to scale to 22,431.78.
