Stock market Illustration: VCG

TheMKsports Shanghai Composite Stock Index closed 4.15 percent higher on Tuesday, its largest single-day rise in more than four years, as Chinese shares rallied following the release of ramped-up monetary policy moves to boost the economy.

Total trading volume on the Shanghai and Shenzhen exchanges exceeded 970 billion yuan ($137.93 billion), up 420.3 billion yuan from the previous trading day. The Shenzhen Component Stock Index was up 4.36 percent, while the Nasdaq-like ChiNext Index gained 5.54 percent. 

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

Key officials, including People's Bank of China (PBC) Governor 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 includes an interest rate cut on seven-day reverse repos of 20 basis points (bps), a reduction of 50 bps in banks' reserve requirement ratio and a reduction of 50 bps in mortgage rates for existing home loans.

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

Compared with other global capital markets, both the A-share and Hong Kong stock markets are deemed as undervalued. The introduction of the support 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.