By Yi Wei Wong

Hong Kong-listed casino stocks jumped in early trading Tuesday after news overnight that restrictions on travel between Macau and China's Guangdong province are being eased.

The Guangdong government said that from July 15, visitors to the Macau special administrative region will no longer have to undergo a 14-day quarantine.

Leading the gains on the Hong Kong stock exchange is SJM Holdings Ltd., which adds 11%. Other top gainers include Wynn Macau Ltd., which is up 6.6%, and Galaxy Entertainment Group Ltd., which advances 5.0%.

The move is an important first step toward the normalization of the gaming industry, JPMorgan says.

The U.S. bank expects demand from Guangdong visitors will now recover to around 70% of pre-Covid-19 levels but that the industry's gross gaming revenue may only improve to 20%-25% of 2019 levels.

The relaxing of restrictions on travel from other Chinese provinces could follow, provided that the impact of Covid-19 continues to ease in China, JPM says.

A full recovery may only take place in 2Q next year, it says.

Casino stocks were among the worst-hit during the pandemic as movement restrictions crimped gaming demand.

Write to Yi Wei Wong at yiwei.wong@wsj.com