Headline indices of the Mainland China equity market spurted on Tuesday, 24 July 2018, as investors chased for bargain hunting across the board, thanks to Chinese government signal to shift to a loser fiscal policy to shield the world second largest economy from the worsening trade row with Washington. Around late afternoon, the benchmark Shanghai Composite Index rose 1.7%, or 47.79 points, to 2,907.33, meanwhile the Shenzhen Composite Index, which tracks stocks on China's second exchange, added 1.5% or 24.18 points, to 1,625.88. The blue-chip CSI300 index rose 1.67%, or 58.36 points, to 3,584.11.

China is looking to adopt more vigorous fiscal policy, and is looking at potential tax cuts for Chinese businesses, helping to drive Asia markets higher for Tuesday. After more than a year of pushing a crackdown on dangerous debt levels in the financial system, Premier Li Keqiang said the government's fiscal policy should be more active, according to an announcement late Monday by the State Council, or Cabinet. Li also stressed the government would accelerate plans to reduce taxes by more than 1.1 trillion yuan ($160 billion) and to issue 1.35 trillion yuan in local government special bonds for infrastructure.

China's central bank lent 502 billion yuan ($74.36 billion) to financial institutions via its one-year medium-term lending facility (MLF), stepping up efforts to support lending as growth slowed.

The shift in focus toward easing also comes after the central bank in July released 700 billion yuan in liquidity by cutting some banks' reserve requirements, prompted by concerns over tighter cash conditions and a potential economic drag from the U.S. trade dispute. It was the third such cut this year.

CURRENCY NEWS: Chinese yuan depreciated against greenback on Tuesday after softer mid-point fixing by central bank. The People's Bank of China (PBOC) had set the midpoint rate at 6.7891 per dollar ahead of the market open, its weakest since July 11, 2017. The fixing was 298 pips or 0.44 percent weaker than Monday's midpoint of 6.7593. The spot market opened at 6.8145 per dollar and eased to a low of 6.8295 before changing hands at 6.8103 at 0408 GMT. The offshore yuan fell nearly 0.6 percent to a low of 6.8448 per dollar, its weakest level since June 2017. It was trading at 6.8285 as of 0416 GMT.