How China’s economic stimulus is boosting global markets today

China, the world's second largest economy, unveiled a slew of stimulus measures to boost its slowing economy thereby boosting stock markets across the world. China's central bank of Tuesday announced its biggest stimulus package since COVID-19 pandemic to pull the economy out of deflation towards the government's growth target.

Reacting to the stimulus measures announced by Chinese government, stock markets across the world surged with many hitting record highs. In the United States, both Dow Jones and S&P 500 hit new all-time highs boosted by mining shares as China is one of the world's biggest markets for iron ore and other mining products which are used as raw materials. Dow Jones surged 0.2 per cent to close at record high of 42,208.22 and S&P 500 index climbed 0.25 per cent to an all-time high of 5,732.93.

Australia's shares also reacted positively with its miners boosting the index by 0.1 per cent to 8,148.

Chinese indices also surged with CSI 300 index rising 2.2 per cent and Shanghai Composite advancing 1.77 per cent. Hong Kong's Hang Seng also reacted positively with a gain of 1.7 per cent.

China's stimulus package included more funding and interest rate cuts to restore confidence in the world’s second largest economy which had been facing slowdown since quite some time now.

The package also aims at reviving the dull property market which has been witnessing slowdown since 2021 by reducing average interest rates for existing mortgages by 50 basis points and lowering minimum down payment requirement to 15 per cent for all type of homes.

China's property market has been in a severe downturn since peaking in 2021. A string of developers have defaulted, leaving behind large inventories of unwanted apartments and a troubling list of uncompleted projects.

China's latest measures come after the US Federal Reserve last week delivered a hefty rate cut, allowing the PBOC to ease monetary conditions without putting too much pressure on the yuan.

(With Reuters inputs)