Hong Kong stocks rose, erasing losses as travel-related stocks surged after China’s announcement that it would ease quarantine rules raised hopes that the country could ease border controls soon. The Hang Seng Index rose 0.9 per cent to 22,418.97 at the close of Tuesday trading, bringing its four-day gains to 6.6 per cent. The gauge is now on its longest winning streak in almost six weeks. The Hang Seng Tech Index added 0.6 per cent, while the Shanghai Composite Index strengthened 0.9 per cent. Airline operators rallied. Cathay Pacific rose 6.4 per cent to HK$8.60. Air China soared 10 per cent to HK$6.78. China Eastern Airlines and China Southern Airlines gained at least 5.3 per cent. Haidilao jumped 7.4 per cent to HK$18.86 while Budweiser rose 4.2 per cent to HK$23.35, leading consumption stock winners. Sands China soared 11.7 per cent to HK$18.20 and Galaxy Entertainment surged 7.9 per cent to HK$47.75. China cut quarantine times by half on Tuesday, requiring overseas travellers to spend seven days in a government-run facility, followed by three days of home isolation, according to the National Health Commission’s latest guidelines. Stocks swung into positive territory upon China’s first step towards easing border restrictions. Chinese stocks’ US$1.8 trillion recovery from April low faces another earnings test as UBS, Citic predict setbacks The local market has rallied 22 per cent from the mid-March rout to add at least US$592 billion of value to members of the Hang Seng Index. Investors have viewed the market more favourably, aided by a softer and friendlier regulatory tone from Beijing and policy stimulus bets, according to JPMorgan Private Bank. With any signs of a durable reopening, markets could take it positively and “rally on the back of reduced uncertainty”, its strategists said in a report on June 26. Still, “the size of the overall policy stimulus is unlikely to match previous easing cycles,” they added. “We are also concerned that in the absence of a clear Covid exit road map, overall sentiment is likely to remain weak and further easing could be rendered less effective.” Stocks fell earlier as traders locked up gains from a rally that lifted the benchmark index to near a three-month high. Tencent Holdings slipped for a second day after its major shareholder decided to cut down its stake. Tencent slumped 3.3 per cent to HK$365.80, adding to a 1.6 per cent setback on Monday. Amsterdam-listed Prosus, which owns 28.8 per cent stake in Tencent, plans to trim its stake gradually to raise money to fund a stock buy-back plan. JD.com also retreated 2.3 per cent to HK$259.40 after Prosus and founder Richard Liu Qiangdong cashed out . Liu sold shares in JD.com’s US-listed shares and Hong Kong-listed JD Health for US$988 million since stepping down as chief executive of the e-commerce group in April, according to filings. CNOOC added 3.6 per cent to HK$10.48 while PetroChina and Sinopec gained at least 2.3 per cent. Oil prices surged to around US$110 per barrel on supply concerns as investors kept an eye on geopolitical developments from the Group of Seven annual meetings. Markets in the Asia-Pacific region rose. The benchmark index in Australia rose 0.9 per cent while equities in South Korea and Japan added at least 0.7 per cent, following overnight declines in main US stock gauges.