China, 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 per cent each. Hong Kong benchmark Hang Seng jumped 3 per cent, while Hang Seng Tech Index surged more than 3 per cent.

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 per cent from 2.30 per cent.

Real estate and broker sectors led the gains, climbing 4 per cent and 3 per cent respectively. While Hong Kong-listed mainland property stocks rose more than 3 per cent.

"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.