China on the rally, why is optimism back?

Asian markets boosted by Chinese gains today.
The rally in dragon stocks intensified after policymakers took further steps to shore up investor confidence, bucking broader weakness in Asia following a lower session on Wall Street, dragged down by technology .
A collapse in Nvidia – which slipped more than 4% – weighed on the Nasdaq and the S&P 500, with sentiment souring the day before the chip giant's quarterly earnings release.
Concerns over Nvidia's high valuation have grown leading up to the company's earnings announcement, expected after trading today.
The stock is up about 225% over the past year.
Investors today are also awaiting new details on the Fed rate cut coming from the minutes, which will be announced in the Italian evening.
Meanwhile, China is stealing the financial spotlight with the closing of trade in clear momentum.
Considering the dragon's terrible stock performance, the euphoria of the session just ended is of interest.
Why is China in the running? What drove the stock rally The gauge of Chinese companies listed in Hong Kong jumped as much as 4% in trading today and the CSI 300 index of mainland shares rose 2.2% during the session to close at + 1.35%.
Real estate developers led the gains after banks increased financing for the struggling sector.
A new crackdown on trading by quant funds has also reduced concerns about short selling.
Specifically, Chinese real estate stocks rose a day after a deeper-than-expected cut to the benchmark mortgage rate boosted hopes that authorities are doing more to support the struggling sector.
The authorities then launched a series of measures to help reverse the trend, including easing restrictions on home purchases to stimulate demand and increasing loans for housing programs.
The latest effort to support the economy came on Tuesday, when the central bank said major lenders had cut the five-year prime lending rate – a benchmark for home loans – to a new low of 3.95% from 4.2%.
It was the sharpest cut made so far, surprising analysts who had expected a smaller reduction.
With investors worried about the housing sector and economic growth in general, “any sign that authorities are providing some support should be welcomed,” said Thomas Mathews, senior markets economist at Capital Economics.
HSBC analysts led by Jing Liu and Erin Simply cutting the prime rate on five-year loans will not be enough to trigger a turnaround in an industry mired in several downward spirals, analysts at Nomura also said.
Attention now turns to the annual meeting of China's National People's Congress in March, which will be closely watched by markets hoping for further support announcements.