On Monday, the benchmark Shanghai Composite index rose 5 percent by mid-morning, and the Hang Seng rallied 2.5 percent, with Anhui Conch Cement, China’s leading cement maker, up 24 percent in Hong Kong.
The rally also extended to Japan, where the Nikkei 225 was up 4.7 percent, ignoring news that core private-sector machinery orders in Japan fell 10.4 percent in July to September, the biggest drop in years.
In Sydney, the S&P/ASX rose 1.5 per cent, helped also by hints from the Australian central bank that it might deliver more rate cuts to boost the slowing pace of growth. The bank on Monday said it now expected the Australian economy to grow only by 1.5 percent this year, rather than the previously-forecast 2 percent; for 2009, it sees growth of just 1.75 percent, rather than 2.5 percent.
China’s stimulus package will bring $586 billion-worth of spending on railways, airports and other infrastructure, and on social welfare projects.
Key rural land reforms have also been recently announced as the authorities grapple with the fact that the economy — which had been powering ahead at 10 percent growth or more in recent years — is now set to grow by only about 8 percent or less this year as the global economic downturn takes its toll on exporters.
Companies seen as potential beneficiaries of the massive Chinese spending program were among the biggest gainers on Monday.
Hitachi Construction Machinery, which generates one-sixth of its sales in China, soared 17 percent in Tokyo. Doosan Heavy Industries & Construction, South Korea’s largest power-equipment maker, jumped 14 percent, and mining giant BHP Billiton rose 7.8 percent in Sydney.
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