Equities in Hong Kong and mainland China led gains in the Asia-Pacific region Tuesday, though stocks in Malaysia and Australia fell to begin the new year.
The Hang Seng Index ended 2% higher, and the Shanghai Composite climbed 1.2%.
Chinese messaging-and-gaming heavyweight Tencent Holdings Ltd.'s (0700.HK) 2.9% gain contributed to the Hang Seng's advance, setting the index is within 3.6% of 2007's record intraday close.
"Most of the bad news is behind us and some stocks are seen as underpriced by speculative buyers," said Linus Yip, an equities strategist at First Shanghai Securities.
Late last year, Hong Kong-listed Sunny Optical Technology Group (2382.HK) and AAC Technologies (2018.HK) lost about a third of their market value in a month, following a global tech pullback which began in November. On Tuesday, the suppliers of smartphone components jumped 9.2% and 7.5% respectively.
Largan Precision Co. Ltd. (3008.TW) , which makes lenses for smartphone cameras, closed up 5.9% in Taiwan after skidding 22% in December. It helped the Taiex end 0.6% higher and finish at a five-week best.
Solid Chinese manufacturing data showed the sector remained healthy, said Krystal Tan of Capital Economics. Global economic growth "and accommodative domestic monetary policy should help keep Asian manufacturing sectors in good shape," she said.
South Korea's Kospi Composite Index ended 0.5%. The gain came as North Korean leader Kim Jong Un said in a speech on Monday that his country would be open to sending a delegation to the Winter Olympics in the South next month.
The government in Seoul welcomed Kim's suggestion on Tuesday. Its unification minister proposed holding high-level talks with North Korean officials (http://www.marketwatch.com/story/south-korea-offers-to-hold-high-level-talks-with-north-over-olympics-2018-01-02) on Jan. 9 to discuss the country's possible involvement in the Winter Games and Kim Jong Un's nuclear program.
One laggard Tuesday was Australia, where the stock benchmark fell 0.1% despite gains in commodity stocks. Banks, a big portion of the equities market there, started 2018 lower. Analysts have previously expressed concerns that higher global interest rates could add to the economic pressure from high household debt in Australia. The S&P/ASX 200 overall ended 2017 with its best three months since the first quarter of 2015.
Malaysia's index also fell 0.8% to reverse the sharp adjustment higher at the end of Friday's trading. Big end-of-session gains of some 10% seen in the likes of Sime Darby Plantation and KLCC Property were largely reversed Tuesday.
The drop came as neighboring Singapore logged a 0.8% gain. Markets in Japan and New Zealand were closed Tuesday.
(END) Dow Jones Newswires
January 02, 2018 10:10 ET (15:10 GMT)