HONG KONG - Hong Kong and Shanghai stocks extended their rally on hopes for more Chinese measures in support of battered markets, while traders elsewhere in Asia tracked Wall Street advances fuelled by strong earnings.
Fresh comments from Federal Reserve officials that poured cold water on hopes for an early interest rate cut appeared to have little impact with investors resigned to the prospect of monetary policy remaining tight well into 2024.
A series of announcements out of Beijing has lit a fire under equities in Hong Kong and Shanghai this week, with Bloomberg reporting that companies have spent more than $4-billion on buybacks after officials called on them to play their part.
The surge on Tuesday came after a unit that controls government stakes in big financial institutions said it would ramp up investments in funds, while regulators said it would urge more action from long-term funds.
The developments follow a long-running rout in Shanghai and Hong Kong -- fuelled largely by worries over China's economy -- that has slashed trillions off valuations.
The crisis is becoming increasingly uncomfortable for the leadership, with Xi Jinping reported to be taking a personal interest.
"Sentiment improved after (Tuesday's) ripping rally in Chinese and Hong Kong stocks," said Kyle Rodda of Capital.Com.
"For now, the measures have had their desired effect," he added, pointing out that the markets were reaching levels that could spell the end of their downward spiral.
Shanghai and Hong Kong each jumped more than one percent Wednesday -- a day after piling on more than three percent and four percent respectively.
But observers warned the measures will not be enough on their own to revive confidence among weary investors, adding that much more needs to be done to kickstart the world's number two economy and address the property sector debt crisis.