Leading Hong Kong shares finished higher on Tuesday, helped by a rebound in laggard blue-chip stocks and China commodity plays such as offshore oil company CNOOC and Maanshan Iron and Steel.
But traders said gains would likely remain limited with investor confidence knocked by global security fears, high oil prices, expectations of a US interest rate increase and fears that China's economy is overheating.
"It's an aberration, a trap. The index will go down again," said Joseph Lau, a director at Tai Fook Asset Management.
The blue chip Hang Seng Index ended up 0.95 percent, or 104.74 points, at 11,072.39.
Volume was below recent averages with HK $12.37 billion dollars (US $1.58 billion) changing hands.
The index of China enterprise companies, known as H-shares, outperformed blue chips, rising 3.86 percent to 3,683.28.
Top performers included Maanshan Iron and Steel, which gained 9.34 percent to HK $1.99, and index heavyweight PetroChina Co Ltd, which rose 3.12 percent to HK $3.30.
China on Tuesday revealed an easing in large scale investments such as roads and power plants, with expenditure on fixed assets rising 34.7 percent in April on an annual basis compared to a 43.5 percent gain in March.
But analysts said fears that China will raise interest rates for the first time in nine years remain after consumer prices in the year through April rose 3.8 percent, their fastest growth in seven years.
Hong Kong's de facto central bank was again active in the market buying Hong Kong dollars on Tuesday in order to maintain the local currency peg to the US currency.
China offshore oil firm CNOOC Ltd led blue chip gainers, jumping 8.41 percent to HK $2.90 after the firm announced plans to repurchase as much as 10 percent of its stock.
The shares will be purchased on the Hong Kong Stock Exchange using cash on hand. Property-heavy conglomerate Wharf Holdings rose 4.93 percent to HK $19.15.
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