HONG KONG (Nikkei Markets) -- Hong Kong shares on Tuesday rose to their highest close since Nov. 8, as investors appeared to shrug off unrest in the city and focused on signs of progress between the U.S. and China on trade instead.
The Hang Seng Index rose 1.6% to 27,093.80. CSPC Pharmaceutical Group added 3.7% after the company reported a 24% jump in net profit for the January-to-September period, and said revenue rose 27.5% from a year ago.
Heavyweights Tencent Holdings and HSBC Holdings advanced 2% and 1.1%, respectively. Energy producers CNOOC and China Shenhua Energy fell 0.3% and 0.5% after Brent crude oil prices declined 1.4% overnight.
Tuesday's gains came even as protests in Hong Kong intensified. A number of anti-government activists remain trapped inside the Hong Kong Polytechnic University campus in a standoff with police that has gone on for three days. The government is calling for the protesters to surrender to the police.
Tensions in the city have flared in recent days after the death of a protester and the shooting of another. Schools in Hong Kong were shut for a sixth day. The Hang Seng Index had shed 4.8% last week as violence escalated.
Andrew Sullivan, director at Pearl Bridge Partners, said trade talks remained the key even for markets. "The protests are secondary as long as China doesn't push the PLA onto the street which would trigger U.S. action," he said.
Hopes of a preliminary trade agreement between Beijing and Washington have bolstered risk sentiment in recent days, lifting the three major U.S. equity indexes to record highs.
Nicole Deng, strategist at CASH Financial Services Group, echoed the sentiment.
"The impact of local events on investor mood is getting less and less," she said, adding that the gauge was returning to a "normal level" following last week's decline. She expects further gains for the Hang Seng Index if a trade agreement is reached.
In the mainland, the Shanghai Composite Index added 0.9%.
Yuk Wing Group Holdings jumped 11.5% in Hong Kong after the drilling equipment maker said it expects profit for the six months ended Sept. 30 to have increased more than 50% from a year ago.
AUX International Holdings surged 37.8% after the Hong Kong-based night club operator said it expects profit for the six months ended in September to have risen more than four times from a year ago.
Ping An Securities Group (Holdings) slumped 26.1% after saying the company's board considered the group's available cash resources were "very limited" and that it plans to apply to the Securities and Futures Commission to cease activities by its financial services business.
Next Digital slid 12.7% after the media company reported a wider net loss for the April-to-September period amid cautious spending by advertisers.
-- Benny Kung