China and Hong Kong stocks jump as aggressive stimulus boosts sentiment

China and Hong Kong stocks rallied broadly for a second day on Wednesday as investors basked in the afterglow of a wide-ranging stimulus package announced in the previous day. In early trade, China's blue-chip CSI300 Index and the Shanghai Composite Index gained more than 2% each.

China and Hong Kong stocks rallied broadly for a second day on Wednesday as investors basked in the afterglow of a wide-ranging stimulus package announced in the previous day.

In early trade, China's blue-chip CSI300 Index and the Shanghai Composite Index gained more than 2% each. Hong Kong benchmark Hang Seng jumped 3%, while Hang Seng Tech Index surged more than 3%. Beijing on Tuesday announced a slate of support measures including rate cuts, mortgage requirement easing, and fresh funding for equity purchases, in a bid to prop up the ailing economy.

In the wake of the announcement, the People's Bank of China (PBOC) on Wednesday cut the rate of one-year medium-term lending facility (MLF) loans to some financial institutions to 2.00% from 2.30%. Real estate and broker sectors led the gains, climbing 4% and 3% respectively. While Hong Kong-listed mainland property stocks rose more than 3%.

"Between now and the ad-hoc Politburo meeting in end-October, in which fiscal measures may be announced to improve demand, the market rally could continue to bring markets higher over the next few sessions," UBS said in a note.

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