By Xie Yu and Clare Jim

HONG KONG (Reuters) -Chinese property developers' share prices surged on Wednesday after regulators expanded a financing programme aimed at supporting bond issuance in the crisis-ridden sector.

CIFI Holdings (Group) Co Ltd soared 40% while Country Garden Holdings Co Ltd surged 23%. The Hang Seng Mainland Properties Index rose 8%.

The National Association of Financial Market Institutional Investors late on Tuesday said it will widen a programme to support about 250 billion yuan ($34.5 billion) worth of debt sales by private firms, including property developers.

The semi-official association under the central bank also said the programme can be expanded further.

Even though the programme may not actually help developers that much, it's the message from the central government, showing its determination to stabilise the sector and the economy, that is boosting sentiment, said Alvin Cheung, associate director of Prudential Brokerage in Hong Kong.

The move comes as cash-strapped property developers struggle to tap sources of funding to finish projects and pay suppliers. Several developers have defaulted on offshore debt obligations in the past year.

More recently, investors have been fretting about the crisis deepening as developers widely believed to have had government backing also missed payments, such as CIFI and Greenland Holdings Corp Ltd.

We think this is a big step to help ease liquidity for top private developers after recent defaults, said Jefferies analyst Shujin Chen in a client note.

Still, there will likely be more defaults given weak recovery in property sales, Chen said.

Developers' offshore U.S. dollar bonds also rebounded. A Seazen 2026 bond was trading at 14.35 cents on the dollar on Wednesday, showed data from Duration Finance, more than 3 cents higher than a day earlier.

Nomura said benefits from the expanded programme are unlikely to be sufficient to resolve developers' financial woes as prolonged contraction in new home sales may reduce funding sources this year by 3.3 trillion yuan.

The property market continued its slump in October, with private data showing home prices and sales falling, indicating lacklustre sentiment and a bleak outlook amid strict COVID-19 curbs that have rattled consumer confidence.

($1 = 7.2470 Chinese yuan)

(Reporting by Xie Yu and Clare Jim; Editing by Edwina Gibbs and Christopher Cushing)