Mainland and Hong Kong stocks rose on Thursday as rare earth and tourism shares rallied as signs of easing China-US tensions lifted investor sentiment.

In Hong Kong, the benchmark Hang Seng Index ended the day up 129 points, or 0.51 percent, at 25,667, the highest close since November 2021.

Leading gains onshore, the rare earth sector surged 5.2 percent to a fresh three-year high. The tourism sector rose 3.4 percent, while China tourism group duty free index jumped by the 10 percent daily trading limit following a launch plan for the Hainan Free Trade Port.

Chinese stocks have been steadily rising in recent weeks, buoyed by Beijing's efforts to curb excessive competition and overcapacity and signs of improving China-US trade relations.

Up north, the benchmark Shanghai Composite Index rose 0.65 percent to 3,605 while the Shenzhen Component Index was up 1.21 percent at 11,193.

The combined turnover of these two indexes stood at over 1.84 trillion yuan, down from 1.86 trillion yuan on Wednesday.

Stocks related to Hainan Free Trade Port, rare-earth permanent magnet and lithium mineral led gains while stocks related to precious metal and banks suffered major losses.

The ChiNext Index, tracking China's Nasdaq-style board of growth enterprises, gained 1.5 percent to close at 2,345.

The Shanghai Composite Index has surged nearly 19 percent from its most recent low in April, nearing the 20 percent gain used to define a technical bull market.

"Although there hasn't been any unexpected change in the top-down macroeconomic picture, there are still many structural opportunities within the stock market," analysts at Cinda Securities said in an note.

Fresh signs of easing trade tensions between Beijing and Washington also helped lift sentiment.

US President Donald Trump said on Wednesday that the United States was in the process of completing a trade deal with China.

Around the region, MSCI's Asia ex-Japan stock index was up 0.3 percent, while Japan's Nikkei index gained 1.6 percent. (Reuters/Xinhua)