Market continues to rise with tax reduction and other stimulus policies

The Shanghai stock index gained 0.88 percent on Tuesday after a government report mentioned the country will take various measures, including tax reduction, to stimulate the economy in 2019.

The benchmark Shanghai Composite Index soared 0.88 percent to close at 3054.25 today, following the stock index surpassing the 3,000 line and hitting a nine-month high on Monday.

The smaller Shenzhen Component Index also shot up 2.25 percent to 9,595.74, and the GEM, or Growth Enterprise Market, surged 3.51 percent to close at 1,676.57.

The total turnover on the Shanghai and Shenzhen bourses hit about 900 billion yuan (US$134 billion), compared with over 1 trillion yuan the previous trading day. 

China plans to reduce tax by up to 2 trillion yuan, including a reduction of the value-added tax rate to 13 from 16 percent, the government report said.

Manufacturing, automotive, mining, electronics and various industries may benefit.

More than 200 shares jumped by the 10 percent daily cap, fueling capital activity and a warm market mood, analysts said.

Home appliances, 5G, tech innovation and shares with smaller market value led the surge.