In this May 29, 2020 photo, the Hong Kong Observation Wheel stands along the waterfront as buildings stand across Victoria Harbor in Hong Kong. (PHOTO / BLOOMBERG)

Hong Kong stocks saw a sudden spike in afternoon trading on Tuesday, with property shares leading the advance. 

The Hong Kong property gauge is trading at 8 times expected earnings over the next 12 months

Hong Kong stocks closed up 488.50 points, or 2.00 percent, at 24,946.63 points on Tuesday. The benchmark Hang Seng Index traded between 24,539.44 and 25,062.41 as inflows from across the border continued for a seventh session. Turnover totaled HK$145.98 billion (about US$18.84 billion).

Before the advance, the gauge had fallen for three straight sessions. A measure of property stocks listed in the city rose 2.1 percent, the most since July 6.

Analysts saw no apparent reason for the surge. The Hang Seng Index has underperformed all year, entering the day down 13 percent in 2020. Hong Kong has recently dealt with a third wave of the coronavirus outbreak, with the city reporting its 41st death Tuesday. 

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Wharf Real Estate Investment Co rose 7.9 percent to lead gains, while New World Development Co and Hang Lung Properties Ltd added at least 3 percent. The city’s home July sales rose 35 percent year-on-year in terms of value, the Land Registry said in a statement Tuesday. That’s the second monthly increase after declines in the January-May period.

The Hong Kong property gauge is trading at 8 times expected earnings over the next 12 months, compared to a peak of 27 reached in 2007.

Financials also rose, with China Life Insurance Co and AIA Group Ltd adding at least 3.8 percent. HSBC Holdings Plc added 1 percent after an earlier drop of 3.9 percent. The lender on Monday reported first-half profit that halved to US$5.6 billion because of higher credit provisions.

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The Hang Seng China Enterprises Index also saw a sudden increase and was last up 2 percent. The Hong Kong dollar traded at 7.75 versus the greenback, at the strong end of its trading band.

Investors from the Chinese mainland had bought HK$3 billion (US$387 million) of Hong Kong stocks as of 2:51 pm local time.