Stock market Illustration: VCG

The Shanghai Composite Stock Index surged by 4.15 percent as of Tuesday closing, marking its largest single-day rise in more than four years, as the broader market experienced a significant rally following the release of ramped-up monetary policies to boost the economy.

The Shanghai and Shenzhen stock trading bourses saw their accumulative trading volume exceed 970 billion yuan ($137.86 billion) on Tuesday, which increased 420.3 billion yuan from the previous trading day. 

By the close of trading on Tuesday, the Shenzhen Component Stock Index soared by 4.36 percent, and the Nasdaq-like ChiNext Index surged by 5.54 percent. Overall, more than 5,100 stocks rose, reflecting a strong sentiment across the board.  

The market's robust performance was largely attributed to a series of significant policy announcements made during a press conference held on Tuesday morning by China's financial sector regulators.

Key officials, including the governor of the People's Bank of China (PBC), Pan Gongsheng, and the heads of the China Securities Regulatory Commission and the National Financial Regulatory Administration, unveiled a comprehensive package of new measures to support economic growth.

The policy package included a 20-basis-point interest rate cut, a 50-basis-point reduction in the reserve requirement ratio soon, and a 0.5-percentage-point reduction in mortgage rates for existing home loans.

In addition, Chinese government officials have announced new monetary policy tools to stabilize the stock market, alongside measures to encourage long-term capital inflows and business mergers and acquisitions.

Market analysts said that the new monetary policy stimulus will continue to boost investor confidence in buying the A-shares.

Compared to the world's other capital markets, both the A-share and Hong Kong stock markets are deemed as undervalued. The introduction of the supportive measures is expected to shift market sentiment positively, attracting more capital to the Chinese markets, Yang Delong, chief economist at Shenzhen-based First Seafront Fund, told the Global Times on Tuesday.