Hong Kong, Shanghai rally on China optimism as Seoul rebounds [Video]

Hong Kong and Shanghai stocks rallied Tuesday after China pledged to adopt a looser monetary policy to revive the stuttering economy, while Seoul rebounded after days of losses fuelled by the brief declaration of martial law by South Korea’s president.

In the latest bid to kickstart growth, President Xi Jinping and other top leaders announced their first major shift in policy for more than a decade, saying they would “implement a more active fiscal policy and an appropriately relaxed” strategy.

The remarks, reported by state news agency Xinhua on Monday, represented a move away from their previous “prudent” approach, sparking hopes for more rate cuts and the freeing-up of more cash for lending.

The announcement comes as Beijing contemplates Donald Trump’s second term in the White House. The president-elect has indicated he will reignite his hardball trade policies, fuelling fears of another standoff between the superpowers.

Leaders have battled for …