HONG KONG, Oct 3 (Reuters) - Hong Kong stocks jumped on Tuesday, led by mainland banks after China's central bank cut reserve ratios and as materials shares found support from economic data out of Beijing that showed stronger-than-expected factory activity.
The blue chip Hang Seng index surged 2.25 percent to end at 28,173.21 points in its biggest daily percentage gain since May 2016.
The Hong Kong China Enterprises Index jumped 3.62 percent to 11,305.38, its biggest daily percentage gain since April 2016.
China's central bank on Saturday cut the amount of cash that some banks must hold as reserves for the first time since February 2016 in a bid to encourage more lending to struggling smaller firms.
Analysts said the move should support banks' net interest margins and profit growth in 2018.
Upbeat manufacturing activity data from China on the weekend also boosted confidence and allayed some concerns about a slowdown.
ICBC rose 7.9 percent, China Construction Bank climbed 5.9 percent and Bank of China gained 4.9 percent. Ping An Insurance Group rose 3.9 percent.
Gaming stocks rose after Macau casino revenue surged 16.1 percent in September from a year ago. Galaxy Entertainment rose 1.5 percent, Sands China gained 0.5 percent and SJM was up 0.4 percent.
Geely Automobile jumped 12.3 percent after Morgan Stanley upgraded it to overweight from equal-weight, and as its parent Zhejiang Geely plans to raise stake in Denmark's Saxo Bank to more than 50 percent.
Chinese markets are closed all week for a holiday and will not resume trade until Oct. 9. (Reporting by Donny Kwok; Editing by Sam Holmes)