China's stock rally could extend another 15% to 20%, Goldman Sachs says. China's equity indexes have jumped dramatically since Beijing announced major stimulus policies. Goldman highlighted still low valuations and diminishing risk as tailwinds for a continued rally.

The government has fired up investors by encouraging banks to lend more to buyers of stock and real estate, but economists say more stimulus is needed.

A sharp rally in China shares at Tuesday's open lost steam as a hotly anticipated briefing by the country's state planner failed to sustain optimism for further stimulus. Mainland markets soared to more than two-year highs on their return from a week-long holiday,