“We’re still relatively sanguine about the risk that Evergrande’s collapse triggers a financial crisis or economic crash in China,” Mark Williams, chief Asia economist at Capital Economics wrote in a report. “Policymakers will use their control of the banking system to prevent financial strains spreading beyond highly-leveraged developers.”

Speculation about Evergrande restructuring suggests the central government is aware of high potential risk related to its bankruptcy and “it needs to take immediate measures to contain all these risks,” said Raymond Cheng, managing director at CGS-CIMB Securities. “We expect both sector’s share prices to see a strong rebound in the near term.”

Other property developers also rode on the upturn. Longfor Group, Country Garden and China Resources Land rallied at least 6 per cent as the best sector performers. Chinese tech stocks also chalked up hefty gains, with Huahong Semiconductor, data centre operator GDS Holdings, Meituan and Alibaba Health Information Technology pacing winners.

Local stocks were also buoyed up by overnight rallies in US stocks and bonds after Federal Reserve Chair Jerome Powell said the central bank could begin tapering asset purchases in November and complete the process by mid-2022. Officials were also more inclined to raise interest rates next year.

On the mainland, Kale Environment Technology, which makes high-volume low speed fans, jumped 70 per cent from the initial public offering price on the first day of trading in Shenzhen.