Hong Kong’s Hang Seng Index surged 13% this week, marking its best weekly gain in 26 years. The index reclaimed the 20,000 level, aided by Beijing’s stimulus measures, including the People’s Bank of China (PBC) cutting the amount of cash that banks must hold as reserves, or the reserve requirement ratio (RRR), by 0.50 percentage points.

At Friday’s (September 27) closing, the Hang Seng Index jumped 3.6% to settle at 20,632.30, the highest level since April 2023. The 13% gain this week is the best rally since an almost 15% jump in late 1998 that restored more than $440 billion in value to local stocks, according to a SCMP report.

The total transaction volume surged to $57 billion on Friday, the highest on record, according to Bloomberg data that goes back to 1992, the report added.

The PBC’s move comes as part of the measures by the Chinese authorities to pull economic growth back towards this year’s target of roughly 5%. A day earlier on Thursday (September 26), Chinese President Xi Jinping, in a politburo meeting, urged officials to mobilise the nation to prioritise reviving the economy.

More fiscal measures are expected before the start of the week-long Chinese holiday season on October 1.  A Reuters report said Beijing plans to issue special sovereign bonds worth about 2 trillion yuan ($284.43 billion) this year as part of fresh fiscal stimulus.

China, the world’s second-largest economy, faces strong deflationary pressures owing to a sharp decline in its property market and weak consumption. The trend exposed the country’s over dependence on exports amid deteriorating trade ties with the United States.

Other key Asian markets settled mixed on Friday. Japan’s Nikkei 225 advanced 0.9%, while South Korea’s Kospi weakened 0.8%.

Meanwhile, benchmark stock indices Sensex and Nifty retracted from lifetime highs to settle lower on Friday due to profit-taking in frontline stocks HDFC Bank and ICICI Bank.

The BSE Sensex declined 264.27 points, or 0.31%, to settle at 85,571.85. During the day, it climbed 142.13 points, or 0.16%, to reach a new record intra-day peak of 85,978.25.

The NSE Nifty dipped 37.10 points, or 0.14%, to 26,178.95 after rising 61.3 points, or 0.23%, to an all-time intra-day high of 26,277.35 during the day.