Hong Kong CNN Business —  

Hong Kong stocks turned in their strongest performance of the year on Tuesday, gaining nearly 4% on news that a controversial extradition bill that sparked months of protests would be completely withdrawn.

The Hang Seng (HSI) Index notched up its biggest daily percentage gain since November 2018 to end at 26,523 points. It got a major boost during afternoon trading from local media reports, subsequently confirmed, that Hong Kong leader Carrie Lam will formally withdraw the bill. Lam had suspended the bill in June after more than 1 million people took to the streets, but that didn’t quell the protests.

Nearly every component of the Hang Seng was up. The biggest gainers were all property developers, which have been battered by the protests and the ongoing US-China trade war. Wharf Real Estate, New World Development and Sun Hung Kai Properties were all up more than 9%.

Wednesday’s rally leaves the Hang Seng standing 2.6% higher for the year so far.

The American Chamber of Commerce in Hong Kong said it welcomed Lam’s announcement, which the lobby group’s chairman called “an important first step to restore business confidence and the city’s international reputation.”

The afternoon gains added to an already good day for the Hang Seng, which climbed in early trading. Index heavyweight Tencent (TCEHY)rose 3.6% after the Chinese internet giant announced it spent 36.4 million Hong Kong dollars ($4.6 million) buying back shares Tuesday. The company has spent nearly 190 million Hong Kong dollars ($24 million) repurchasing shares for the last five sessions.

WH Group (WHGLY) — another Hang Seng component that is also the world’s largest pork processor — advanced 7.9% after Chinese officials pledged to strengthen the government’s support of pig production to stabilize pork prices. China’s pork industry has been hit hard by an epidemic of African swine fever.

Last month, the Hang Seng recorded a 7.4% drop — one of the worst among major global indexes. The index has been weighed down by escalating US-China trade tensions as well as intensifying protests in the city.

China’s Shanghai Composite Index was up 0.9%, ending higher for a third straight day, after new data from China’s services sector looked promising. Activity improved in August at the strongest pace in three months, according to a private survey conducted by Caixin/Markit.

“China’s economy showed clear signs of a recovery in August, especially in the employment sector,” wrote Zhonegsheng Zhong, the director of macroeconomic analysis at CEBM Group, in a statement that accompanied the data.

He noted that the US-China trade war remains a drag on business, but added that the Chinese government is taking measures to promote economic growth.

Elsewhere in the region, Japan’s Nikkei 225 (N225) was up about 0.1%. South Korea’s Kospi rose 1.2%.

The gains followed sour sentiment out of the United States, where markets closed sharply lower Tuesday after Monday’s holiday. Investors were returning to new US and Chinese tariffs, which went into effect over the weekend. Intensifying concerns about Brexit and the tumult it could bring to the UK and European economies didn’t help.

Here are some other talking points at 7:45 p.m. Hong Kong time:

CNN’s James Griffiths and Anneken Tappe contributed to the report.