Hong Kong stocks surged by the most in almost three months as upbeat factory data pointed to a robust recovery in the Chinese economy. Asian markets gained on back of renewed China optimism. The Hang Seng Index jumped 4.2 per cent to 20,619.71 at the closing of Wednesday trading, the biggest gain since December 5. The Tech Index surged 6.6 per cent, while the Shanghai Composite Index added 1 per cent. Among the biggest winners were Tencent Holdings which advanced 7.3 per cent to HK$368.80 and property developer Longfor which surged 9.6 per cent to HK$24.55. Search engine giant Baidu jumped 7.6 per cent to HK$145 while Alibaba Group leapt 6.2 per cent to HK$91.90. Electric car maker BYD climbed 6.3 per cent to HK$224.40 while Geely Auto gained 4.3 per cent to HK$10.62 before rival Nio releases a key earnings report that will give investors more clues about electric vehicle (EV) demand in China. China’s factory activity expanded at its fastest pace in more than a decade in February, with the official manufacturing purchasing managers’ index (PMI) rising to 52.6 from 50.1 the previous month, China’s statistics bureau said on Wednesday. A reading above 50 indicates expansion from the previous month. The struggling property sector also showed signs of recovery last month as policy measures provided some relief. New home sales by the 100 largest developers climbed 14.9 per cent to 461.6 billion yuan (US$67 billion) from a year earlier, according to research from real estate agency E-House. “The post-Covid recovery appears to have broadened” as construction, new home sales and movement of people have all recorded robust growth, Nomura economists including Ting Lu said in a research note on Tuesday. They expect China’s GDP growth this year will reach 5.3 per cent. Today’s gains helped Hong Kong stocks recover from their lowest point this year, after a 9.4 per cent rout in February erased US$324 billion of market capitalisation from the city’s stock market. Foreign investors only added 9.3 billion yuan (US$1.3 billion) worth of A-shares last month, a drastic slowdown from January. “The recent market correction was mainly due to profit-taking” amid a policy vacuum and rising geopolitical uncertainties, analysts at Ping An Securities said in a note on Tuesday. The rally based on China’s reopening post-pandemic could regain its momentum if stimulus measures coming out of the “two sessions” are stronger than expected, though investors should beware of rising volatility, they added. China’s most important political gatherings , the National People’s Congress and the Chinese People’s Political Consultative Conference, will hold their annual meetings in Beijing from March 4. Investors are now pinning their hopes on more supportive policies to boost growth. Two stocks debuted on Wednesday. Radar maker Naruida Technology jumped 30 per cent to 60.40 yuan on its first day of trading in Shenzhen, while Anhui Huaren Health Pharmaceutical surged 57 per cent to 25.31 yuan in Shanghai. Most Asian markets climbed on Wednesday on the back of China optimism, with the Kospi in South Korea and Nikkei 225 in Japan rising 0.4 and 0.3 per cent respectively. The S&P/ASX 200 in Australia lost 0.1 per cent.