Tech Surge Lifts China Stocks Amid Anticipated Economic Stimulus

China's stock market saw gains on Tuesday, primarily driven by a 3.7% rise in the technology sector, as investors look forward to potential stimulus measures from the upcoming Third Plenum meeting. Hong Kong shares remained relatively flat. Analysts suggest the market's downside is limited due to government assurances.

China stocks surged on Tuesday, boosted by a significant rise in technology shares, as investors eagerly await the Third Plenum meeting where economic stimulus measures are anticipated.

The CSI information technology index led the rally, jumping 3.7%, while trading turnover slowed, and mutual fund issuance cooled, according to UBS analysts.

Despite northbound outflows, UBS analysts believe the downside is limited, thanks to the government's assurances to safeguard capital markets. China's upcoming Third Plenum, scheduled for July 15-18, is expected to introduce fiscal and financial reforms, bolstering investor confidence.

At the close, the Shanghai Composite index rose 1.26% to 2,959.37, with the blue-chip CSI300 index climbing 1.12%. Meanwhile, the Hang Seng index in Hong Kong remained mostly unchanged, down by 0.11% to 17,443.15.

(With inputs from agencies.)