China First Heavy Industries, which makes equipment used in the mining and energy industries, fell in its first day of trading in Shanghai, bolstering speculation demand for IPOs is drying up as stocks drop.
Hong Kong stocks gained 239.39 points, or 1.22 percent to close at 19,790.28 on Tuesday.
Chinese equities rose Tuesday for the first time in the past four trading days, with the benchmark Shanghai Composite Index edging up 0.47 percent, or 13.67 points, to 2,948.84 points.
China First Heavy Industries (CFHI), a leading heavy industry manufacturer, opened at 5.48 yuan ($0.8) per share for its debut at the Shanghai Stock Exchange, breaking its initial public offering (IPO) price.
Huatai Securities Co hopes to raise as much as 17.26 billion yuan in an initial share sale in Shanghai, where two companies that went public in the past month fell on their first trading day.
The biggest tumble in developing-nation stocks in 11 months is making investment strategists at Morgan Stanley, Credit Suisse Group AG and Goldman Sachs Group Inc as bullish as ever.
China's benchmark stock index fell as developers dropped on concern tighter lending standards will curb demand for property, countering gains by consumer-related companies ahead of the weeklong Lunar New Year holiday.
China's stocks may rebound after this month's Lunar New Year holiday because the government won't tighten monetary policy too aggressively given the outlook for economic growth, according to the nation's top-ranked brokerages.
'Unlucky' time for tying the knot may take shine off jewelry sales in China...
China's State-owned assets watchdog will encourage more qualified State-owned enterprises (SOEs) to go public this year, since the capital market has strongly supported the development of central enterprises in recent years, Shanghai Securities News reported Monday, citing a senior official.
Hong Kong stocks lost 114.19 points, or 0.58 percent, to close at 19,550.89 on Monday.
Chinese equities edged 0.13 percent lower Monday to 2,935.17 points, renewing the lowest level in the past three month since it ended at 2,939.40 points on the previous trading day.