At closing bell, the benchmark Shanghai Composite Index added 1.44%, or 41.72 points, to 2,931.75. The Shenzhen Composite Index, which tracks stocks on China's second exchange, rose 1.77%, or 33 points, to 1,898.35. The blue-chip CSI300 index rose 1.51%, or 59.58 points, to 4,014.57.
Investors were in a risk-on mood from the get-go, as the U.S. Federal Reserve announcing a new corporate debt purchasing program underpinned hopes for the U.S. and broader global economic recovery. Sentiment in Asia got a further boost after reports that the administration of U.S. President Donald Trump is preparing a one-trillion-dollar infrastructure proposal to shore up the U.S. economy, which has been battered by the novel coronavirus crisis.
The Bank of Japan kept its monetary settings steady as widely expected but increased the nominal size of its lending packages for cash-strapped firms to $1 trillion from about $700 billion announced last month. Also, minutes of the Reserve Bank of Australia's latest meeting showed that the country's economic downturn could be shallower than earlier expected.
Meanwhile, buying sentiments underpinned further after the latest data revealed that China's economic activities remain on track for recovery. actory activities continued to pick up in May with the value-added industrial output, an important economic indicator, going up 4.4% year on year, 0.5 percentage points higher than in April, data from the National Bureau of Statistics showed yesterday. Output of the equipment manufacturing sector and the high-tech manufacturing industry in May grew by 9.5% and 8.9%, respectively, indicating continuous optimization of the industrial structure, the bureau said. Other key economic indicators also showed signs of a rebound on the back of supporting policies to coordinate growth and the control of the COVID-19 epidemic. In the first five months, fixed-asset investment declined 6.3% year on year to 19.92 trillion yuan (US$2.81 trillion), narrowing by 4 percentage points from the decrease in the first four months. The service sector expanded 1% in May from a year earlier, reversing the 4.5% drop in the previous month, while for the January-May period it fell 7.7% year on year, compared with the decline of 9.9% in the first four months. China's retail sales of consumer goods, a major indicator of consumption growth, declined 2.8% year on year in May, rebounding from a drop of 7.5% in April.
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