(Bloomberg) -- Hong Kong shortened the isolation period for people who test positive for Covid and their close contacts, and will require inbound travelers to take two fewer rapid tests, as the city takes another cautious step toward a full reopening.

From Friday, people infected with Covid and their close contacts will be able to leave isolation if they test negative on both the fourth and fifth day, health official Libby Lee said at a briefing on Thursday. That’s down from the current rule of seven days and will apply to everyone, including people who are unvaccinated — who previously had to spend 14 days in isolation.

The city will also require inbound travelers to conduct rapid tests for five days after their arrival, down from seven. Hong Kong will keep a requirement for two PCR tests for new arrivals, while an outdoor mask mandate and other social-distancing measures will be maintained for now.

Read more: HK May End Outdoor Mask Rule, Shorten Isolation, Reports Say 

Hong Kong — which reported the most Covid infections since March — has been slowly rolling back the Covid rules that have kept it isolated from the world throughout the pandemic, battered its standing as a global financial hub and hurt economic growth. The incremental easing follows a raft of relaxations of mainland China’s tough Covid Zero curbs, including reducing the scale and frequency of mass testing, allowing some patients to isolate at home and limiting the size and length of lockdowns. 

Hong Kong stocks jumped on local media reports that the isolation period would be shortened, with the official announcement coming after the market closed. The Hang Seng Index rose as much as 3.8%, erasing Wednesday’s selloff, while a gauge of Chinese tech stocks trading in the city surged. A Bloomberg gauge of Macau casino shares surged as much as 13%.

Hong Kong will be cautious around easing further measures, with case numbers increasing and the hospital system under immense pressure, Lee said. 

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