SHANGHAI, Jan 25 (Reuters) - China stocks rallied for a third straight session on Thursday, after the country's central bank announced supportive policies including a deep cut to bank reserves to spur a fragile economy and prop up tumbling share markets.
Wednesday's 50-basis points (bps) cut by the People's Bank of China (PBOC) in the amount of cash banks must hold as reserves was the biggest in two years and will inject about $140 billion of cash into the banking system.
China's blue-chip CSI300 Index and Hong Kong's Hang Seng benchmark were both up roughly 1% at GMT 0240.
The three sessions of rebound came after the blue chip index hit a five-year low last week as the world's second-largest economy struggles with a fragile post-pandemic recovery, heavy local government debts and a weak property sector.
The PBOC on Wednesday also said it is widening the uses for commercial property lending by banks in its latest effort to ease a liquidity crunch facing troubled real estate firms.
"Markets welcomed the policy announcement," said Tao Wang, chief China economist at UBS Investment Bank.
"The latest PBOC announcements may be interpreted as the beginning of a policy pivot from previous reactive and piecemeal measures by investors, and they will continue to look for further signs and acts of policy support."
Shares in real estate developers, infrastructure and communications jumped 2.6%, 3.6% and 4.1%, respectively, to lead the gains.
In Hong Kong, tech giants added 0.3% and mainland property developers surged 3.7%. (Reporting by Shanghai Newsroom Editing by Shri Navaratnam and Lincoln Feast.)
