Hong Kong stocks rose for a second day on optimism about corporate earnings thanks to a slew of stimulus measures and a government-backed think tank’s proposal for a 2 trillion yuan (US$280.5 billion) stock-stabilisation fund.

The Hang Seng Index gained 1.9% at noon. The Hang Seng Tech Index rallied 2.8%.

Pop Mart's shares rose 18% after the Chinese toy maker guided for third-quarter revenue to more than double.

GCL Technology rose 18%; Li Auto, Geely Auto rose 8.5%; Meituan rose 6.2%; XPeng rose 5.4%; JD.com rose 3.4%; Tencent rose 2.4%.

A Chinese policy think tank has called for Beijing to issue 2 trillion yuan ($280 billion) of special treasury bonds to set up a stock market stabilisation fund, the 21st Century Business Herald reported on Wednesday.

Such a fund could steady the market through buying and selling blue-chips and exchange-traded funds (ETFs), according to the proposal by the Institute of Finance & Banking, affiliated to the Chinese Academy of Social Sciences (CASS).

The proposal is part of a quarterly report by the institute on China's economy. CASS is China's premier academic organisation, although it was unclear if or how the proposal would influence policy.

When asked about the potential setup of a stock market stabilisation fund last month, China's central bank chief Pan Gongsheng told reporters a study of the proposal was under way.

China's recent policy stimulus has triggered a furious rally in stocks, though that euphoria has turned into caution in past weeks. Blue-chip stocks have gained roughly 24% over the past month.

“Expectations for the economy and earnings are improving after the roll-out of the stimulus packages,” said Xue Jun, an analyst at Orient Securities in Shanghai. “Given the depressed valuations and the backdrop of the rate cut in the US, the rebound in stocks is expected to be sustainable.”