Mainland stocks closed down on Tuesday as investors took profits and stayed cautious amid a lack of fresh catalysts.

That lack of direction also affected Hong Kong, with the benchmark Hang Seng Index inching up by 47 points, or 0.18 percent, to 26,696.

China's blue-chip CSI300 Index ended 0.9 percent lower while the Shanghai Composite Index lost 0.4 percent.

Mainland equities have largely traded range-bound this month, as investors rotated across sectors during a lull in corporate earnings and policy announcements.

UBS analysts expect China's economy to expand by 4.5 percent in 2026, down slightly from previous years, as weakening exports weigh on overall growth.

Domestic activity is likely to remain resilient, even as the property sector continues its downturn, they said, adding contractions are seen easing.

Liquor shares edged down after a 5 percent rally from the previous day.

Onshore AI shares fell 2.4 percent while tech majors traded in Hong Kong were little changed.

China's baijiu industry recorded its steepest quarterly earnings decline in a decade in the third quarter of 2025, according to HSBC analysts.

The analysts said demand and pricing are likely to stay subdued in the absence of policy support. They expect earnings pressure to persist for several more quarters, with destocking likely to continue through the fourth quarter of 2025 and the first quarter of 2026.

Hong Kong shares of electric vehicle maker Xpeng jumped more than 18 percent to their highest level since July 2022, after the company said last week it would roll out three self-developed robotaxi models and start trial operations in 2026.

Ganfeng Lithium shares rose as much as 4 percent on progress in its Argentina lithium project. (Reuters/Xinhua)