Hong Kong shares have jumped 1.10 per cent on hopes for fresh US stimulus as well as comments from Chinese Premier Wen Jiabao hinting at fresh monetary easing by Beijing.
The benchmark Hang Seng Index on Wednesday added 217.51 points to 20,075.39 on turnover of HK$50.33 billion ($A6.26 billion).
"We will, according to economic trends, make full use of the advantage of having relatively big space for fiscal and monetary policy (moves)," Wen said in a speech to the World Economic Forum in the eastern city of Tianjin.
He later emphasised that the government has about a one trillion yuan ($A152.14 billion) surplus on its balance sheet and around 100 billion yuan in what he called "stability and adjustment funds".
The government "will not hesitate to use" such money, he said following the speech.
The comments suggested Beijing was ready to announce new measures to boost growth with moves such as lowering the amount of money banks must keep on reserve, or even cutting interest rates.
In the United States, the Federal Reserve policy committee begins a two-day meeting on Wednesday, after which there is a expectation it will unveil new measures to spur growth, with most analysts tipping a third round of bond-buying, or quantitative easing.
"I believe September is going to be a good month, due to expectations of more stimulus measures from both China and the US," said Ben Kwong, Chief Operating Office at KGI Asia.
Hong Kong and mainland property developers rallied. Henderson Land rose 3.1 per cent to $HK52.50, a 52-week high for the second consecutive session, while Cheung Kong added 2.0 per cent to $HK111.70 and China Overseas Land climbed 1.6 per cent to $HK18.96.
China Eastern Airlines surged 4.7 per cent to $HK2.43 but Italian luxury goods maker Prada slid 1.9 per cent to $HK58.85 - adding to a 6.3 per cent loss on Tuesday.
Chinese shares ended 0.28 per cent higher. The benchmark Shanghai Composite Index added 6.00 points to 2,126.55 on turnover of 69.2 billion yuan ($A10.50 billion).
"Premier Wen's comments lifted sentiment while investors continued to digest news from last week that China had approved a batch of infrastructure projects," Zheshang Securities analyst Zhang Yanbing told AFP.
China last week unveiled a massive infrastructure package worth more than 1.0 trillion yuan, including projects ranging from subway lines to highways.
Qinling Cement surged by its 10 per cent daily limit to 4.00 yuan while Gansu Qilianshan Cement rose 4.42 per cent to 11.81 yuan.
Sichuan Western Resources jumped 6.77 per cent to 10.10 yuan, Jiangxi Copper gained 3.32 per cent to 22.69 yuan and Baotou Steel Rare-Earth climbed 1.82 per cent to 35.81 yuan.
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