Chinese stocks rally after stimulus measures

Chinese stocks rallied on Friday, buoyed by a slew of policies introduced by the government to prop up the economy.

The benchmark Shanghai Composite Index gained 2.88 percent to close at 3,087.53 points, while the Shenzhen Component Index soared 6.71 percent to reach 9,514.86 points at the close.

The combined turnover of stocks covered by the two indices stood at 1.45 trillion yuan (about 206.84 billion U.S. dollars), surpassing 1 trillion yuan for the third consecutive day.

Over 5,200 stocks ended higher - with those related to the energy and metal sectors leading the gains.

"The Shanghai and Shenzhen stock exchanges continued their strong rally on Friday, extending the upward trend seen in the past three trading days. The bullish trend in the A-share market is gradually solidifying, largely being driven by policy initiatives. During a State Council press conference, officials from the People's Bank of China, the National Financial Regulatory Administration, and the China Securities Regulatory Commission introduced a series of significant policies, greatly boosting investors' confidence in economic recovery," said Yang Delong, chief economist at Qianhai Open Source Fund.

In terms of market performance, stocks related to lithium batteries and lithium mining surged, while sectors such as securities, real estate, software development, and liquor also showed strength.

"Market trading volume has surpassed the 1 trillion yuan mark for three consecutive trading days, indicating a significant boost in investor confidence. Not only are domestic investors firmly bullish on A-shares, but numerous foreign entities have also expressed optimism about Chinese assets," said Yang.

China's central bank cut the reserve requirement ratio by 0.5 percentage points for financial institutions and lowered the interest rate of seven-day reverse repos by 20 basis points on Friday.

The interest rate of seven-day reverse repos, a key short-term policy rate, was lowered from 1.7 percent to 1.5 percent on Friday, according to the central bank. This drop is the largest in nearly four years.

The ChiNext Index, tracking China's Nasdaq-style board of growth enterprises, jumped 10 percent to close at 1,885.49 points on Friday.

The value of China's international trade in goods and services reached approximately 4.18 trillion yuan in August this year, marking an increase of 4 percent year on year, official data showed on Friday.

In U.S. dollar terms, the country's exports of goods and services amounted to 322.4 billion U.S. dollars, while imports totaled 263.5 billion dollars, recording a surplus of 58.9 billion dollars, the State Administration of Foreign Exchange said.

The export value of goods reached nearly 2.07 trillion yuan while the import value of goods totaled about 1.5 trillion yuan, resulting in a surplus of 572.4 billion yuan.

The value of exported services amounted to 230.8 billion yuan and the value of imported services stood at 383 billion yuan, producing a deficit of 152.2 billion yuan.