Hong Kong shares climb 2.7 pct on China policies to boost economy

HONG KONG, Oct 2 (Reuters) - Hong Kong shares climbed nearly 3 percent on Friday, extending gains from two-year lows hit earlier in the week, as investors cheered moves by China to prop up its sluggish property market and stumbling economy. Casino stocks jumped after data showed a smaller drop in gaming revenues than the previous month. Shares of Galaxy Entertainment surged 9.6 percent, Wynn Macau gained 9.1 percent, Sands China rose 7 percent and SJM Holdings climbed 7.5 percent. The benchmark Hang Seng Index rose 2.7 percent to 21,408.78 points, putting it on track for a weekly gain. The stock market, which plunged more than 20 percent in the third quarter, was closed on Monday and Thursday for public holidays. The China Enterprises Index, which tracks Chinese companies listed in Hong Kong, climbed 3.3 percent to 9,710.98, lifted by a 16 percent jump in shares of Great Wall Motor after China cut taxes on small cars. China on Wednesday said it will cut the minimum downpayment level for first-time home buyers in many cities, the second measure in two days to fire up consumption. "Even if this might not have much impact on property prices, it shows the central government has policy intentions to boost GDP growth," said Castor Pang, head of research at Core Pacific-Yamaichi in Hong Kong. The main index could rebound to 22,200 points in the short term, he added. China's markets will be closed until Oct. 8 for the National Golden Week holidays. Hong Kong's financial and property stocks rose nearly 3 percent, while IT shares jumped 3.4 percent and materials climbed 3 percent. Hong Kong is due to report August retail sales data later on Friday after the city posted a drop for the fifth straight month in July, weighed down by a drop in tourist arrivals and a stock market plunge that hurt consumer sentiment. The gap between H and A shares of Chinese-listed companies was near 130, indicating that despite the recent fall in mainland stocks, they remain more expensive than their Hong Kong-listed counterparts. A summer stock market crash and China's surprise devaluation of its currency in August sent shockwaves through global markets, raising concerns both inside and outside of China about Beijing's ability to manage its economy. (Reporting By Anne Marie Roantree and Jessica Macy yu; Editing by Simon Cameron-Moore)