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gaining nearly 4% on news that a controversial extradition bill that sparked months of protests would be completely withdrawn.

Hang Seng Index HSI Thenotched 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."