Hong Kong stocks turned negative in afternoon trading, erasing earlier gains. Hong Kong stocks jumped yesterday spurred by China’s move to embrace more aggressive stimulus policies to revive growth.

The Hang Seng Index fell 0.1% to 20,397.33 in the afternoon, paring a 2.8% gain on Monday. The Hang Seng Tech Index dropped 0.8%.

Sentiment took a sudden turn for the better after a readout of a Politburo meeting chaired on Monday by President Xi Jinping said China would adopt more proactive fiscal policies and “moderately loose” monetary policies next year to boost domestic demand.

It was the first time that the Politburo had used the phrase “moderately loose monetary policies” since 2010, when China was dealing with the aftermath of the global financial crisis. That compared with the “prudent monetary policies” wording that top policymakers have been using over the past few years. The rhetoric on the fiscal approach also shifted to “more proactive” from “proactive”, signalling that the government would raise the borrowing limit to spur domestic demand.

The readout from the Politburo meeting leaves the door open for broad-based looser policies next year, pointing to more cuts in interest rates and a higher deficit ratio. The conference readout came just days before a central economic work conference that is expected to set the policy tone for next year.

In terms of individual stocks, China cosmetics firm Mao Geping shares soared 90% in Hong Kong debut.

Xiaomi showed off a new SUV it plans to sell around the summer of 2025, intensifying an effort to take on Tesla Inc. and BYD Co. in the world’s biggest electric vehicle arena. The shares gained 0.7%.

In terms of other star stocks, Bilibili rose 3%; JD.com rose 2%; NetEase and Meituan rose 1%; Baidu, Li Auto, Tencent, and XPeng fell 1%.