China stocks edge up on policy support pledge

China's stocks saw a slight uptick on Tuesday as the country's cabinet pledged to bolster counter-cyclical policy support amid growing economic pressures, although trading activity remained subdued before the upcoming holiday. Hong Kong's shares, however, experienced a decline.

The Shanghai Composite Index climbed by 0.1%, while the Hong Kong benchmark Hang Seng fell by 0.6%. China's real estate developers were among the top gainers onshore, with Vanke shares surging nearly 8% following the State Council's commitment to implement measures to stabilize the property market.

Analysts at Goldman Sachs anticipate that policymakers will broaden the utilization of housing provident funds to modestly lower weighted-average mortgage rates, and more large cities will introduce local housing easing measures.

AI component makers showed a slight rebound in sentiment, with the 5G Communication Index up by 0.8% and the tech-focused STAR50 Index rising by 0.6%. However, rising US Treasury yields, along with insufficient liquidity ahead of the week-long holiday, dampened the market sentiment, according to analysts at Northeast Securities.

Despite the negative sentiment, quality assets have become more appealing again after the sharp declines. China's week-long National Day holiday commences on Thursday, with onshore trading resuming on October 8.

The Hang Seng Innovative Drug Index rose by 3.3%. Tech majors listed in Hong Kong experienced a decline of 1.4%. Shares of fast-fashion platform Shein Global Holdings fell to their lowest level since its debut on September 1.