Leading stocks advanced for the first day in three yesterday, mainly supported by index heavyweight HSBC after it declared a third interim dividend of 14 US cents per share on Monday.
HSBC saw heavy buying from investors yesterday and rose as much as 0.65 per cent before ending the day 0.33 per cent higher at $122.30. Brokers said HSBC's latest dividend would give support to the stock in the short term.
Following the 220-point slump on Monday, the Hang Seng Index rebounded in the morning trading session before losing steam and drifting into negative territory.
Brokers said index futures-related buying on blue chips including China Mobile, Hutchison Whampoa and Sino Land saved the benchmark index just before the market closed, pushing it up to finish the day 37.41 points or 0.26 per cent higher at 14,403.2.
Trading was quieter with turnover at $15.34 billion, compared with $17.18 billion on Monday.
Francis Lun Sheung-nim, a general manager at Fulbright Securities, said rising interest rates and a possible outbreak of bird flu in Hong Kong continued to dampen investor interest and would continue to cast a shadow over the market performance.
