By Laura He, MarketWatch

HONG KONG (MarketWatch) -- Hong Kong stocks bounced back on Wednesday following two straight sessions of losses, with Chinese banks posting broad gains after the country's regulator approved first preferred-share issues by banks.

The Hang Seng Index ended up 0.4%, with mainland Chinese banks gaining across the board.

Bank of China Ltd. and Agricultural Bank of China Ltd. rose 1.4% and 0.3% each, after the two state-owned giants announced separately Tuesday night that they've received the regulator's approval to issue the country's first preferred shares to reduce financial stress.

Their domestic peers were also well bid. China construction Bank Corp. advanced 1.4%, Industrial and Commercial Bank of China Ltd. added 1.2%, and Bank of Communications Co., Ltd. tacked on 0.7%.

Meanwhile, several major Chinese developers posted gains, with China Resources Land Ltd. and China Overseas Land & Investment Ltd. , both Hang Seng constituents, up 0.6% and 0.2%, respectively. Sino-Ocean Land Holdings Ltd. jumped 3.5%, and China Vanke Co. , the country's largest residential developer by sales, improved by 1.6%.

Mobile operators China Telecom Corp. and China Unicom Hong Kong Ltd. moved up 5.2% and 0.3% each, after reports said Apple Inc.'s (AAPL) iPhone6 has entered the final stage for approval in mainland China. Bigger rival China Mobile Ltd. retreated slightly after previous gains, down 0.2%.

In other Asian markets, Japan's Nikkei Average edged down 0.2%, with the yen (USDJPY) strengthening to Yen108.59 from Yen108.80 in the previous day. The broader Topix index fell 0.4%.

Elsewhere, Australia's S&P/ASX 200 declined 0.7%, while South Korea's Kospi Composte Index rose 0.3%.

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