Stock markets in Hong Kong and China advanced Wednesday following an overnight rally in the Wall Street.

U.S. stocks rallied Tuesday on speculation that the Federal Reserve would implement further measures to support the economy. All the three major indices gained more than 1.15 percent, erasing some of their losses from a day earlier.

Chicago Federal Reserve Bank President Charles Evans told Bloomberg that he would support a variety of measures to generate faster job growth. Markets sentiments were tinged with disappointment last week as Federal Reserve Chairman gave no indication of introducing further accommodative measures. He told the Congress that the Fed would wait to see if additional stimulus was needed.

Hong Kong's Hang Seng gained 0.35 percent or 65.59 points to 18,938.15 and Chinese Shanghai Composite surged 1.1 percent or 25.11 points to 2,314.90.

However, gains were limited by concerns of the persisting debt crisis looming over the euro zone. Spain's 10-year government bond yield surged to a 15-year high Tuesday, reflecting worries that the 100 billion euros lent to Spain would worsen the country's debt problems. Meanwhile, Fitch ratings downgraded 18 Spanish banks, citing concerns over further loan deterioration.

Banking and some resource companies' shares advanced in Hong Kong. CNOOC Ltd gained 1.52 percent and BOC Hong Kong Holdings rose 1.36 percent while HSBC Holdings Plc advanced 0.85 percent.

Esprit Holdings Ltd shares slumped more than 21 percent following the sudden resignation of its chief executive, Ronald van der Vis.

Insurance and auto companies' shares led the rally in Shanghai. Insurance companies' shares rallied Wednesday on news that regulators were weighing expanding investment options for insurers.

The China Insurance Regulatory Commission is considering moves to allow insurers to conduct margin trading, short selling and trading in financial derivatives both abroad and domestically, Reuters reported citing the Securities News.

Ping An Insurance Group climbed 6.31 percent and China Life Insurance Co Ltd rallied 6.24 percent in Shanghai.