HONG KONG (Nikkei Markets) -- Hong Kong shares ended higher on Tuesday, recovering slightly from a selloff the previous day that was triggered by flaring political tensions in the Asian financial hub.
The Hang Seng Index climbed 0.5% to 27,065.28 after falling as low as 26,794.61 earlier. Social media and gaming company Tencent Holdings added 2.2% ahead of its third-quarter earnings release on Wednesday. It contributed more than a third of the gauge's gains by points.
Property developers extended losses. Swire Pacific and Wharf Real Estate Investment Company slipped 0.4% and 0.2%, respectively, after the stocks shed between 4% and 5% on Monday amid a broad weakness in Hong Kong's equity markets.
The city's main equity gauge on Monday suffered its worst single-day drop in about three months, as political unrest in the city intensified after the police shot at least one protester during demonstrations. Later, police fired tear gas in the city's Central business district as protests continued into lunch hour. A video shared widely on social media showed what looked like a protester setting a man on fire following an argument. Monday's escalation followed a weekend of unrest after the death of a student protester on Friday following a fall during clashes.
"Yesterday's drop was quite overdone. It is a surprise to see such a weak rebound today," said Ivan Li, investment research department director at CSL Securities. He said the drop was a confluence of factors, also triggered by updates about trade talks and profit-taking after recent gains.
The protests extended into Tuesday, with activists staging demonstrations in the city's central business district and also attempting to block traffic.
Still, CSL Securities' Li said odds for deeper losses at current levels were "not big."
The drop on Monday followed a recent rally that lifted the index to three-month highs and caused a measure of momentum to signal the gauge was overbought. The index's 14-day Relative Strength Index, which climbed over the 70 level last week, was at 52.3.
Meanwhile, investors are also on edge over mixed messages about the progress of Sino-American trade talks. Last week, China said both sides had agreed to roll back tariffs imposed on goods imported from each other. President Donald Trump on Friday described reports about how much the U.S. was willing to roll back tariffs as incorrect.
Investors are awaiting more clarity on when Beijing and Washington will sign phase one of a trade agreement, an imminent move flagged by both nations in recent days.
In the mainland, the Shanghai Composite Index edged 0.2% higher. The yuan traded onshore rose 0.1% against the dollar at 7.0032.
Jinchuan Group International Resources fell 1.6% in Hong Kong after the minerals and metals miner said it expects to record a "substantial decrease" in net profit for the full year ending December due to a $25 million legal settlement.
China Longyuan Power slipped 0.7% after reporting a 0.8% decline in October power generation.
China Financial Leasing Group jumped 11.6% after saying its unit entered a memorandum of strategic cooperation with Youbank Foundation related to investments in digital assets. Financial terms were not disclosed.
Vtech Holdings surged 13.5% after the electronics products maker reported a 31% increase in net profit for the six months ended Sept. 30.
Property developer Greenland Hong Kong Holdings added 2.2% following a 37.7% jump in contracted sales for October.
-- Benny Kung