(June 1): Hong Kong stocks headed for their best day in more than two months, after President Donald Trump’s response to China for its crackdown on Hong Kong stopped short of fully escalating tensions between the two nations.

The Hang Seng Index rose as much as 3.7% Monday morning on volume that was almost three times the 30-day average for this time of day. Real estate firms, which had borne the brunt of selling in recent days, led the rally. Sun Hung Kai Properties Ltd. surged the most since September, while Swire Pacific Ltd. jumped 6%.

While the U.S. president’s speech Friday was heated in rhetoric, it lacked specifics around measures that would directly impact the city. He announced the U.S. would begin the process of stripping some of Hong Kong’s privileged trade status without detailing how quickly any changes would take effect and how many exemptions would apply.

“Trump’s comments gave no immediate measures on Hong Kong and leave room for negotiations with Beijing,” said Castor Pang, head of research at Core Pacific- Yamaichi International. “Trump’s comments have eased investors’ concern about the impact of potential sanctions on the Hong Kong economy.”

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Traders had increased their hedges at the end of last week due to concern over Trump’s speech. Short selling volume on Hong Kong’s main board climbed to 21% of total turnover Friday, the highest proportion in data going back more than two decades.

The Hang Seng Index is trading below its price-to-book value, near a record low. It fell almost 7% in May, clocking up the biggest drop relative to the MSCI All-Country World Index since the Asian financial crisis in 1998.

Waves of mainland capital have flooded into equities listed in Hong Kong, especially megacap Chinese banks, countering losses sparked by sweeping national security legislation. The stakes are high: a panicked business community could trigger cascading outflows that crash its markets and cause runs on its banks.

The US$4.9 trillion (S$6.90 trillion) stock market, the world’s fourth largest, is now the most volatile since 2012, according to a measure of historical 100-day swings on the Hang Seng Index.