China, Hong Kong stocks extend rally on more stimulus cheer

China stocks surged again on Monday after posting their best weekly performance in nearly 16 years last week as Beijing rolled out further stimulus measures to arrest a slowdown in the broad economy.

China's central bank said late on Sunday it would tell banks to lower mortgage rates for existing home loans before October 31, as part of sweeping policies to support the country's beleaguered property market.

Adding to efforts to reverse the property downturn, Guangzhou city announced the same day the lifting of all restrictions on home purchases, while Shanghai and Shenzhen eased curbs on buying.

That lit a fire under stocks in China and Hong Kong early on Monday, led by gains in property companies.

The CSI300 blue-chip index and the Shanghai Composite Index soared about 6 per cent each, with mainland-listed property stocks jumping more than 8 per cent.

Hong Kong's benchmark Hang Seng Index last traded 1.5 per cent higher.

The CSI300 index soared nearly 16 per cent last week and the broader Shanghai composite jumped nearly 13 per cent, both scoring their biggest weekly gains since November 2008.

Similarly, the Hang Seng Index delivered its biggest weekly rise since 1998, and fifth largest in the last half century.