(Yicai) Sept. 26 -- China’s stock markets have all logged large gains today after the central government released a clear indication that it will be ratcheting up economic support, following disappointing economic data in August that led analysts to fear that growth in the third quarter will slow without strong stimulus measures.

It is necessary to increase the countercyclical adjustment of fiscal and monetary policies, Xinhua New Agency reported today, citing a meeting recently held by the Political Bureau of the Central Committee of the Chinese Communist Party to analyze the current economic situation and determine further work.

This includes issuing ultra-long-term special treasury bonds and local government special bonds to better leverage the role of government investment, reducing the reserve requirement ratio, slashing interest rates and rolling out more policies to support the real estate market, the Politburo said.

The Shanghai Composite Index climbed 3.6 percent to end the day at 3,000.95, the first time that it has returned to above the 3,000 threshold since July 3. The Shenzhen Stock Exchange Index advanced 4.4 percent to 8,916.65 and the Shenzhen ChiNext Index ended up 4.4 percent at 1,714.14.

The stocks of around 95 percent of the more than 5,000 companies listed on the Chinese mainland closed higher today. More than 150 stocks soared by their daily limit, most of which are in the property and liquor industries. Real estate giant China Vanke’s share price [SHE:000002] surged 10 percent to CNY8.04 (USD1.15) and distiller Wuliangye Yibin’s stock [SHE:000858] jumped 10 percent to CNY134.31 (USD19).

The country should effectively implement existing policies, step up efforts to roll out incremental policies, make policy measures more targeted and effective, and strive to accomplish the targets for this year's economic and social development, the Politburo said.

A few days before, on Sept. 24, the country’s financial authorities announced a raft of easing measures, including reducing the deposit reserve ratio by 0.5 percentage point, trimming the central bank's policy interest rate by 0.2 percentage point, and cutting the interest rate on existing mortgages by 0.5 percentage point.

China's stock markets rose sharply that day, with the Shanghai Composite Index soaring 4.2 percent, the Shenzhen Component Index jumping 4.4 percent and the ChiNext Index surging 5.5 percent and yesterday they all recorded an increase of more than 1 percent.

Key economic gauges for August, including industrial, consumption and investment indicators, were all below market expectations, according to data released earlier by the National Bureau of Statistics.

This led market analysts to predict that the country’s gross domestic product growth rate would be slower in the third quarter than the 4.7 percent logged in the second quarter. Therefore, in order to reach the annual growth target of around 5 percent, more economic stimulus is urgently needed.

Editor: Kim Taylor