Surging mainland-related and utility stocks kept the market ahead yesterday even as index heavyweight HSBC dropped to its lowest level in two years.
The Hang Seng Index ended 71.61 points, or 0.93 per cent, higher at 7,733.47, buoyed by persistent talk that Beijing would reduce interest rates, brokers said.
Wall Street's gains on Monday also supported sentiment, they said.
HSBC, however, which makes up about a quarter of the index's weighting, fell $3.50 to $147, its lowest close since October 8, 1996.
Brokers said the counter was coming under pressure as deterioration in non-Asian markets, especially Latin America, was seen affecting its operations.
Meanwhile, HSBC's valuations relative to international banking stocks were less competitive after fallouts in the sector on Wall Street in the past few weeks.