Restaurants in Guangzhou, South China's Guangdong Province resumes dining-in service on December 1, 2022 Photo: VCG

As more Chinese local governments have moved to adopt more flexible and precise anti-epidemic measures, China's capital markets staged a rally on Thursday, as investors anticipate a strong rebound in the disease-burdened consumption sector.

The decision by some districts in Guangzhou, South China's Guangdong Province to ease anti-COVID-19 restrictions on Wednesday was a shot in the arm for Chinese mainland investors, while the US Federal Reserve's signal of slowing interest rate hikes also boosted market sentiment, analysts said.

At market close on Thursday, the benchmark Shanghai Composite Index rose 0.45 percent, the Shenzhen Component Index gained 1.4 percent, and the tech-heavy ChiNext board was up 1.53 percent.

These gains marked a very positive start for the last month of 2022, after mainland stocks already made the biggest monthly gain this year on the benchmark Shanghai market, a development that market observers attributed to expectations for a faster recovery.

The Shanghai market jumped by 8.91 percent in November, while Hong Kong's benchmark Hang Seng Index surged by 26.62 percent.

The gains on mainland markets on Thursday came after local governments gradually rolled out anti-epidemic policies that are more scientific and precise and vowed to avoid large-scale lockdowns.

In particular, Guangzhou, which is suffering from a relatively severe wave of coronavirus, further refined its COVID-19 prevention measures on Wednesday by announcing that it will lift temporary restrictions in some regions and officially allow qualified close contacts to be quarantined at home.

Officials in Beijing also announced plans to optimize nucleic acid testing services during a media briefing on Wednesday, saying that certain groups of people like those who study and work at home are no longer required to participate in neighborhood tests.

Following the optimizing of COVID-19 control measures, consumption entities started to gradually reopened in some areas that have been affected by outbreaks.

Some shopping malls in Guangzhou's Tianhe district announced that they would no longer require patrons to present a 48-hour negative nucleic acid test result, according to media reports.

Multiple shopping malls in Beijing, including Beijing Raffles City, also said that they were reopening to the public as of Thursday, the Beijing Daily reported.

Haidilao, a popular hotpot chain, told the Global Times that more than 60 percent of the company's restaurants in Guangzhou have resumed dine-in services, while other restaurants are actively preparing to do so.

The tourism sector also showed signs of a robust rebound in recent days.

Data sent by qunar.com to the Global Times showed that instant searches for train tickets from Guangzhou surged 2.5 times after Guangzhou lifted temporary controls. Searches for the keyword "Guangzhou" also rose by more than 300 percent on domestic tourism service platform Ctrip.

On Thursday, mainland liquor stocks rose by 2.62 percent, with two companies' shares rising by the daily limit of 10 percent.

Experts said more precise controls will further boost domestic consumption and investment confidence.

As more people are able to step out and actually spend money, the flow of people will stimulate consumption potential and drive economic development, Zhang Yi, CEO of iiMedia Research Institute, told the Global Times on Thursday.

Dong Dengxin, director of the Finance and Securities Institute at the Wuhan University of Science and Technology, said that more enterprises can resume work with improved production, especially in logistics and the supply chain, leading to strengthened business confidence.

Confidence will be enhanced as investors will remain optimistic about future economic development, while the potential of industries like manufacturing, catering, tourism, transportation, and other sectors will be further activated, he said.

Market sentiment was also bullish because of the signal sent by the US Federal Reserve that the US might soon slow efforts to raise interest rates for combating inflation, market observers said.

Fed Chairman Jerome Powell confirmed on Wednesday that he sees the central bank in a position to reduce the size of rate hikes as soon as next month, CNBC reported.

The yuan's central parity rate against the US dollar rose 544 basis points to stand at 7.1225 on Thursday.