On Tuesday, Hong Kong shares declined, mainly on the back of selling, which was triggered by disappointing HSBC earnings, and dominated trading, while the China stocks, on the other hand, slipped down on profit-taking after a recent rally.

HK's benchmark Hang Seng Index, which had managed to soared to a more than five-week closing high on Monday, fell 0.83% or 173.94 points to 20,882.99. The China Enterprises Index, however, managed to remain firm and rose to about a six-week high at 12,021.70 before steadying at 11,967.79 at midday, up 0.46%.

Shares of HSBC slipped by some 7% to a session low of HK$80.60 in Hong Kong, which has been the stock's lowest value in over two weeks. Europe's biggest bank managed to miss expectations for 2009 earnings, mainly on rising bad debt, with profit of $7.1 Billion compared with 2008's figure of $9.3 Billion.

Brokers have shared that investors had started switching to Chinese financial shares after the bank's disappointing performance.

"HSBC was out of our (buying) consideration while Chinese insurers and banks appeared to be better bets as many of them are still under valued", said Patrick Yiu, a director at CASH Asset Management.