HSI Claws Back, But Protests Continue To Cast Shadow

Hong Kong stocks ended with gains Tuesday, clawing back some of the hefty losses from the previous day but traders remained on edge as the city was hit by fresh protests that blocked key roads and shut businesses.

The Hang Seng Index gained 0.5 percent, to 27,065.

Traders moved cautiously after stocks plunged more than 2 percent on Monday as the city was wracked by some of the worst violence seen during months of protests, with one person shot and another set on fire.

The city remains on edge, with sporadic protests taking place on Tuesday, while the US expressed "grave concern" over the situation in Hong Kong and called for restraint by security forces and protesters.

"It is the 24th week of unrest and it is still very unclear what can de-escalate the situation," said National Australia Bank's Tapas Strickland. "Nevertheless, for as long as Beijing gives Hong Kong latitude to deal with the protests, it is likely the unrest will only have an isolated impact on financial markets."

Oanda senior market analyst Jeffrey Halley said concerns about Chinese intervention would increase, "potentially putting another nail into a Hong Kong economy that is now deep in recession".

Other Asian markets broadly rose with investors keeping tabs on the latest developments in the China-US trade talks.

Shanghai climbed 0.2 percent, Tokyo, Seoul and Taipei each ended 0.8 percent higher, Singapore added 0.6 percent, and Jakarta put on 0.1 percent.

However, Sydney fell 0.3 percent, while manila was off 0.4 percent. (AFP)