(Bloomberg) — Chinese shares rallied ever closer to a bull market after Beijing unexpectedly halved the mandatory quarantine period, marking a key shift away from the government’s fixation with Covid Zero that has clouded the outlook for investors.

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The CSI 300 Index closed 1% higher Tuesday, taking the gauge from an April low to a 19% gain — among the best-performing major benchmarks in the world during that period. Hong Kong’s Hang Seng Index erased an earlier loss to close 0.9% higher. Currencies strengthened in Thailand and Australia — countries that count on China for tourists and trade.

China’s move to cut its quarantine period to 10 days from three weeks for inbound travelers shows authorities’ increasing concern about the economic toll from stringent virus restrictions. The change will fuel investor optimism that along with the support from monetary and fiscal policies, Chinese stocks will continue to outperform while global peers buckled under the pressure of rising interest rates.

“This relaxation sends the signal that the economy comes first,” said Li Changmin, Managing Director at Snowball Wealth in Guangzhou. “It is a sign of importance of the economy at this point.”

China’s determination to eradicate Covid at all costs has been a key overhang for the economy’s outlook. With Tuesday’s announcement seen as likely to foster a recovery in the world’s second-biggest economy, other assets also got a boost.

Futures contracts on the S&P 500 traded up 0.6%. The yuan also erased losses to rise in both offshore and onshore markets.

US-listed Chinese travel stocks saw strong gains in premarket trading, with hotel chain Huazhu group Ltd. up 11% and Trip.com Group Ltd. surging 15% amid results. Large-cap Chinese internet stocks including Alibaba Group Holding Ltd. and Baidu Inc. also rose.

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Bullish calls have been getting louder on Chinese stocks, helping the CSI 300 Index outperform global peers by the most since 2014 this quarter. The People’s Bank of China pledged to keep monetary policy supportive to aid the economy’s recovery, Governor Yi Gang said in comments from a rare interview with a state broadcaster released Monday. Easing of lockdowns in Shanghai and Beijing has also fueled the advance.

And with inflation just over 2% — in contrast to more than 8% in the US — the People’s Bank of China is in a sweet spot that allows authorities to focus on policy stimulus.

“This news suggests that perhaps the authorities will not be as stringent with Covid controls as has been expected,” said Jane Foley, a strategist at Rabobank in London.

“The news also coincides with reports that the PBOC is pledging to keep monetary policy supportive,” she said, referring to Governor Yi Gang’s latest comment. “Together this suggest a potentially more optimistic outlook for the Chinese economy which is good news generally for commodity exporters such as Australia and all of China’s trading partners.”

(Updates with US-listed Chinese stock trading in seventh paragraph.)

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