China, HK stocks extend rally on further stimulus cheer
Updates at 0246 GMT
SHANGHAI/SINGAPORE, Sept 30 (Reuters) -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.
Benchmark indexes in mainland China soared about 6% shortly after opening on Monday, while Hong Kong's Hang Seng Index .HSI jumped as much as 3%, led by gains in property companies. The index was last trading 1.8% higher.
The moves came after China's central bank said late on Sunday it would tell banks to lower mortgage rates for existing home loans before Oct. 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.
"The market is still surprised by China's policy support and momentum is still continuing," said Kenny Ng, strategist at China Everbright Securities International in Hong Kong.
The CSI300 blue-chip index .CSI300 pared some of its early gains and was last up 5%, while the Shanghai Composite Index .SSEC traded 4.45% higher.
Mainland-listed property stocks .CSI000006 rose 5.8%, while consumer staple shares .CSICS advanced 6%.
In Hong Kong, the Hang Seng Mainland Properties Index .HSMPI surged 7%, with technology shares .HSTECH gaining 4.6%.
Sunday's developments were the latest in a slew of aggressive stimulus measures announced by Beijing last week - ranging from outsized rate cuts to fiscal support - in an attempt to shore up its ailing economy.
That lit a fire under beaten-down Chinese equities that had been languishing near multi-year lows earlier this month, as investors fretted over China's growth prospects.
Particularly in a boost for stocks, the People's Bank of China's (PBOC) also introduced two fresh tools to boost the capital market, one of which includes a swap programme allowing funds, insurers and brokers easier access to funding in order to buy stocks.
The CSI300 index soared nearly 16% last week in the wake of the announcements and the broader Shanghai composite .SSEC jumped nearly 13%, 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.
"A coordinated stimulus blitz suggests that China has reached a 'whatever it takes' moment with economic risks reaching Beijing's pain threshold," said Eli Lee, chief investment strategist at Bank of Singapore.
"Beyond a short-term rebound, although it is now premature at this point to assess, we cannot rule out that this could be the start of a sustainable bull market if Beijing delivers sufficiently sizeable stimulus to successfully drive a turnaround in macro fundamentals."
Reporting by Shanghai Newsroom and Tom Westbrook in Singapore; Editing by Muralikumar Anantharaman and Sherry Jacob-Phillips
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