The blue-chip CSI300 index closed up 1.25% at 5,132.71 points. Despite its strong performance on Monday, the index was, however, down 1.5% for the year and more than 13% below peaks hit in February.
At the close, the benchmark Shanghai Composite index was up 0.67% at 3,547.84 points, while the smaller Shenzhen index ended up 1.93% and the start-up board ChiNext Composite index closed higher by 3.68%.
Analysts and economists attributed the gains to China’s efforts to sustain the economic recovery momentum as the People’s Bank of China (PBOC) said it would cut the amount of cash that banks must hold as reserves, releasing around 1 trillion yuan in long-term liquidity to underpin the economy.
Meng expects liquidity-sensitive sectors and those with strong earnings growth expectations, including EV, batteries, new energy, to outperform in the short term.
Meanwhile, markets showed little reaction to the Biden administration’s decision on Friday to add 14 Chinese companies and other entities to its economic blacklist over alleged human rights abuses and high-tech surveillance in Xinjiang.
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