HONG KONG (Reuters) - Shares of Chinese property developers rallied on Thursday on hopes that cities in the mainland will roll out more relaxation measures to boost the embattled sector.
The Hang Seng Mainland Properties Index in Hong Kong jumped more than 5% in morning trading, while China's CSI Real Estate Index rose more than 4%.
The southern Chinese city of Guangzhou will allow bigger reductions in home prices - of up to 20% from 6% previously - Chinese financial news outlet Yicai reported on Thursday, the biggest cut by any top-tier city in the country.
Chinese cities set limits on how much developers can raise or lower their prices. The government is wary of big price cuts as it does not want property prices to tumble or for the cuts to trigger protests from previous buyers.
Financial information outlet REDD reported on Thursday, citing two sources, President Xi Jinping said in a closed-door meeting in late August that reasonable relaxation policies should be implemented as soon as possible to turn around the housing market.
The four top-tier cities, Beijing, Shanghai, Shenzhen and Guangzhou, are, however, excluded from being asked to roll out more relaxation, the report said.
Country Garden, Guangzhou R&F Properties, CIFI Holdings, Logan Group and Times China all surged by more than 10%, versus a 0.5% rise in the broader market Hang Seng Index.