Thursday's move on mainland markets lifted Hong Kong's Hang Seng index 1.1 percent with locally listed Chinese shares leading gains. The China Enterprises index ended up 1.5 percent.
In China, the Shanghai Composite rose 2.6 percent to finish the day well above the 2000-point mark. Some investors believe that when the index is below 2000 -- as it was briefly on Wednesday, and nearly again early Thursday -- there's a big chance authorities will take steps to prop up the stock market.
The CSI300 index of top Shanghai and Shenzhen listings ended Thursday up 3.1 percent, with Chinese brokerage stocks the biggest beneficiaries of the rebound.
On Wednesday, both mainland indices had hit their lowest levels since early 2009.
Hong Kong and China markets started Thursday on a weak note although some quarter-end adjustments to portfolios by fund managers had spurred a mild, low-volume recovery by midday.
Shortly after the lunch break, however, Chinese shares rose sharply on strong volumes sparking a broad-based rally in Hong Kong and lifting other Asian markets.
In Hong Kong, though, short-selling accounted for 10.7 percent of the daily turnover on Thursday, the highest since Sept. 5. This suggests that some investors were betting that the talk about China moves would turn out to just be talk, making shares pull back.
Traders attributed Thursday's gains to speculation that the China Securities Regulatory Commission (CSRC), the country's markets watchdog, would announce steps to support beleaguered domestic markets that could include more reforms to initial public reforms.
"This has clearly been viewed positively by the mainland punters," said a Christian Keilland, head of trading at BTIG in Hong Kong, adding that the aggressive buying in the afternoon was consistent with the view that the market would be supported if the Shanghai Composite drops to the 2000 points level.
Shares of Haitong Securities rose 6.3 percent while the largest listed broker Citic Securities was up 4.9 percent. Smaller rival Sinolink Securities jumped 10 percent.
Citic shares in Hong Kong were up 3.9 percent.
The sharp gains did leave investors vulnerable should the rumours about imminent steps to prop up the markets prove unfounded.
The CSRC had a regular meeting scheduled on Thursday, which sparked some talk that the body might curb the number of share issues coming to market, one of several changes many want to see. But a source at the CSRC later told Reuters that reforming the system for initial public offers was not on the agenda.