Chinese stocks jump as Beijing signals more economic support.

Chinese equities rallied by the most in 10 weeks as traders turned buyers of everything from baijiu producers to construction firms on expectations of increased support for the economy.

The benchmark CSI 300 Index rose 2.6 per cent, its best day since May 25. Consumer shares led gains, with

Kweichow Moutai Co. and Wuliangye Yibin Co. adding at least 4.5 per cent. In Hong Kong, the Hang Seng Index gained 1.1 per cent.

Monday’s move higher follows a much-watched Politburo meeting Friday, which was seen to indicate that authorities will likely take more steps to help struggling small businesses, boost fiscal spending and possibly reduce the reserve requirement ratio for banks again.

“Some investors are buying dips thinking most of the bad news on regulations is behind them,” said Margaret Yang, a strategist at Dailyfx in Singapore. “It has been oversold. The resurgence of virus cases is also aiding hopes that PBOC (People’s Bank of China) may ease policy in the second half.”

The gains follow a volatile week for the world’s second-largest equity market, after a ban on swaths of the tutoring industry from making profits sparked concerns that other industries could be targeted.

While China continued to tighten rules on technology firms on Friday, there have been attempts to ring-fence its clampdown, with the securities regulator meeting banks to reassure them.

“The Politburo meeting has emphasized stability again, so the downside for stocks won’t be too large,” said Chen Shi, fund manager at Shanghai Jade Stone Investment Management Co. Investors may also find comments from the Chinese securities regulator over the need for talks with its U.S. counterpart over initial public offerings reassuring, Chen said.

The U.S. SEC said it is increasing disclosure requirements for IPOS in America of Chinese companies.