China shares surge

China stocks reversed course to end higher on Tuesday, led by gains in consumer and financial shares, as investors chased firms with low valuations following recent upbeat factory data.

The blue-chip CSI300 index rose 0.4% to 3,851.09, while the Shanghai Composite Index closed up 0.3% at 2,884.70.

The benchmark Shanghai index briefly hit a more than three-month low in early morning trade, as Washington's latest tariffs added to jitters over the prospects of a so-called "phase one" Sino-US trade deal.

Helping recoup losses were consumer discretionary and financial stocks, with bellwether Gree Electric climbing 5.4%.

Market was also underpinned by robust northbound inflows via the Stock Connect linking Hong Kong and Shanghai, which totalled 4.6 billion yuan for the day, as foreign investors increase their China exposure.

For now, it's a relatively good choice to pursue the strategy of buying stocks with low valuations as China's temporary economy stabilization due to countercyclical policies would help promote risk appetite for those players, including financial firms, Changjiang Securities noted in report.

Factory activity in China unexpectedly returned to growth in November for the first time in seven months, as domestic demand picked up on Beijing's accelerated stimulus measures to steady growth.

Around the region, MSCI's Asia ex-Japan stock index was weaker by 0.43%, while Japan's Nikkei index closed down 0.64%.

At 07:19 GMT, the yuan was quoted at 7.0409 per US dollar, barely changed from its previous close.

So far this year, the Shanghai stock index is up 15.7% and the CSI300 has risen 27.9%, while China's H-share index listed in Hong Kong is up 2.4%. Shanghai stocks have risen 0.44% this month.

As of 07:20 GMT, China's A-shares were trading at a premium of 29.08% over the Hong Kong-listed H-shares.