Hong Kong's stock market soared Wednesday after local media reported that the city's embattled leader is planning to fully withdraw a loathed extradition bill, one of the main demands of pro-democracy protesters.

The Hang Seng index leapt more than three percent in afternoon trade after the South China Morning Post and HK01 both published reports that the city's pro-Beijing chief executive Carrie Lam was planning to shelve the bill.

The semi-autonomous city has been battered by three months of huge, sometimes violent, protests that were initially sparked by a plan to allow suspects to be extradited to the Chinese mainland for the first time.

The protests evolved into a wider democracy campaign involving clashes between protesters and police, in the biggest challenge to China's rule of Hong Kong since its 1997 handover from the British.

For the last three months both Lam and Beijing have refused to make any concessions to the protesters beyond agreeing to suspend the bill, a move that fell far short of demands that it be permanently shelved.

But on Wednesday the first indications that some type of compromise might be offered began to emerge.

One pro-establishment lawmaker who asked to remain anonymous told AFP that their camp was being summoned to meet with Lam on Wednesday afternoon at 4pm (0800 GMT) ahead of an expected major announcement -- although the lawmaker said he did not know what the announcement would be.

Citing sources, the South China Morning Post reported that Lam would announce a full withdrawal of the bill later in the afternoon. Local news website HK01 had similar reports.

That speculation sparked jubilation on the stock market which has been battered by both China's trade war with the United States and Beijing's refusal to find a political solution to the weeks of protests in the international financial hub.

Shares leapt on the news with companies like HSBC rising 3.4 percent and troubled airliner Cathay Pacific soaring nearly nine percent.

The city's hugely influential property sector also saw massive gains with the HSI Property Index jumping more than six percent after the reports.

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