Stocks and bonds of Chinese developers jumped on signs that Beijing could moderate its tough stance on the beaten-down property sector, while sector heavyweight China Evergrande Group 
EGRNF,
+3.45%

3333,
+6.75%

again averted default by making another set of last-minute bond payments.

By midafternoon Thursday in Hong Kong, the Hang Seng Mainland Properties index had gained 5.6%, building on a rally in the previous session. Some real-estate stocks surged more, with China Aoyuan Group Ltd. 
3883,
+11.93%

gaining 10% and China Vanke Co. 
000002,
+9.54%

jumping 7%.

On Wednesday, The Wall Street Journal reported that Chinese regulators are considering easing rules on leverage to help struggling developers sell off assets.

The rules, dubbed the “three red lines,” have hurt the ability of developers like Evergrande to make disposals to repay debts. The People’s Bank of China is considering allowing buyers to take over assets without affecting their own debt ratios, people with knowledge of the discussions told the Journal.

An expanded version of this report can be found at WSJ.com

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