China’s benchmark stock index rallied the most in two months on Friday. The development — riding on consumer shares leading gains on expectations of more policy support for the sector — is in sharp contrast with the Indian experience in recent months as both the Sensex and the Nifty lost nearly 15 per cent each since the onset of the market downturn on September 26.

According to a Bloomberg report, the CSI 300 Index closed up 2.4 per cent to its highest level since mid-December amid reports that officials from the finance ministry, commerce ministry, the central bank and other government bodies plan to hold a press conference on Monday to outline measures to boost consumption.

“The press conference on boosting consumption fanned expectations on policy support,” Shen Meng, a director at Beijing-based investment bank Chanson & Co, was quoted in the report. “But if it falls short of providing details on increasing income, such optimism may weaken to some extent.”

Unlike in the Indian markets where most experts are yet to spot a broader buying opportunity despite the recent slide in stock prices, China witnessed a stellar climb in equities this year due to a number of factors, ranging from a rotation within Asian and emerging market portfolios and DeepSeek’s technology breakthrough.

As most market participants say, a longer lasting rally will depend on a meaningful return of global funds, the announcements at Monday’s official briefing will be watched closely.

The gains in China’s stock market on Friday reflect signs of renewed optimism over policy stimulus after the government set an ambitious economic growth target of about 5 per cent for this year at the National People’s Congress. In an early sign that this year’s tech-driven rally in Chinese stocks may be broadening out, all 10 of the CSI 300’s sector gauges rose on Friday.

Quoting Ken Chen, an analyst at KGI Securities, the Bloomberg report said that authorities are expected to brief the media on policies such as those on subsidising a consumer trade-in programme and efforts to strengthen the social safety net that include better childcare and elderly-care services.

Recently, China’s financial regulator vowed to develop consumer finance to boost consumption, including encouraging banks to speed up issuing personal-consumption loans besides pledging to increase financing support to service industries such as retail, accommodation, catering, tourism, education and healthcare.

The Bloomberg report said that a sub-gauge of consumer staples — including stocks of liquor companies and childcare products — surged more than 5 per cent, its biggest gain since November 7.

Sentiment towards the consumer sector has improved following the NPC, where top leaders made boosting consumption — in a country characterised by high savings propensity — a top priority for the first time since President Xi Jinping came to power over a decade ago. Though details on the plan remain sketchy, some analysts have recommended investors to buy consumer stocks, which seem to have triggered the rally.

The Chinese banking stocks, said the report, also advanced amid possibilities of a reduction in banks’ reserve requirement ratio which would free up more funds for lending. The gains came after the country’s central bank repeated a pledge on Thursday to cut the ratio and interest rates at an appropriate time to support growth.

Investors are also hoping that a slew of January and February economic data due to be released on Monday will offer positive cues.

The consumption boost is positive for the sector’s stocks but it remains to be seen whether they can hold on to the gains, Jeremy Yeo, an analyst at SMBC Nikko Securities in Tokyo told Bloomberg.