SHANGHAI: China and Hong Kong shares ended higher on Thursday after the People’s Bank of China kicked off a swap programme aimed at supporting the stock market, while investors await directions from further policy announcements.

China’s blue-chip CSI300 Index and the Shanghai Composite Index both rose more than 1%. Hong Kong’s benchmark Hang Seng index was up 3%.

The central bank said it would start accepting applications for its 500-billion-yuan ($70.62 billion) swap facility from financial institutions - a move aimed at channelling more cash into the stock market.

“I believe the move provides liquidity to help companies fund trades if needed,” said Lorraine Tan, director of equity research for Asia at Morningstar.

Tan, however, said that the continuation of the stock rally depended on the details of policies to more effectively address excess housing inventory and boost consumer activity.

Meanwhile, investors await details on fiscal stimulus from a highly anticipated finance ministry press conference on Saturday.

Stephen Chang, managing director and Asia portfolio manager at PIMCO, said they are closely monitoring for more policy announcements, especially fiscal policy, as additional easing is needed to achieve a sustainable recovery.

“If we see aggressive supporting measures announced in the near term, then it could likely sustain the recent risk-on sentiment towards China,” Chang said.

Despite the moderate gains on Thursday, China’s stock rally was losing momentum this week, and its sovereign bond futures were broadly up.

Chinese stocks tumbled on Wednesday as investors locked in profits following a blistering 10-day rally.