Chinese shares continued to advance towards the end of the trading week as the government rolled out more stimulus, boosting investor confidence, and overshadowing the slump in industrial profits in August.
The Shanghai Composite Index, the main gauge of Chinese stocks climbed 2.9%, or 86.58 points, to cap Friday's session at 3,087.53. The Shenzhen Component Index jumped 6.7%, or 598.22 points, to 9,514.86. Mainland equities were at their best week since 2008, even boosting Asian shares to their highest in two and half years.
The People's Bank of China introduced more rate cuts as previously announced, with the reserve requirement ratio trimmed by 0.5 percentage points, bringing banks' weighted average RRR to 6.6%.
The interest rate on seven-day reverse repos was also lowered to 1.5% from 1.7%.
"Beijing seems finally determined to roll out its bazooka stimulus in rapid succession... Beijing's recognition of the severe situation of the economy and lack of success in a piecemeal approach should be valued by markets," said Ting Lu, chief China economist at Nomura.
The news overshadowed the 17.8% drop in industrial profits in August, the sharpest in 15 months. It swung from a 4.1% growth in July.
In corporate news, TCL Technology Group (SHE:000100) closed with a 6% gain, following the announcement that it will acquire 80% of LG Display's (KRX:034220) Chinese joint venture unit for 10.8 billion yuan.
Zhejiang Shuanghuan Driveline (SHE:002472) jumped 6.9% at the close of trading as it expects its third-quarter net profit to rise to between 250 million yuan and 270 million yuan.
Ganfeng Lithium Group's (SHE:002460, HKG:1772) shares on the Shenzhen bourse soared almost 10% as it disclosed plans a battery recycling joint venture worth 100 million yuan.
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