Hong Kong's Hang Seng Index , which began the day slightly lower after overseas markets fell, remained weak as earnings from large caps kept the benchmark on the defensive. The index was down 0.17 percent at 22,819.83 by the midday trading break.

Property developers edged higher in Shanghai as China's plans to ramp up affordable housing continued to attract investors.

Some analysts also said money was coming out of the real estate market and into stocks as government measures to cool the sector, which include raising bank reserve requirements, begin to show results.

"The pace of new share issuance has slowed and investors are pulling money out of the property market and putting it into the stock market. Property stocks are relatively cheap now," said Zhang Qi, an analyst at Haitong Securities in Shanghai.

The property sub-index rose 2.6 percent, led by the largest developer by market capitalisation, China Vanke Co Ltd , up 2.2 percent, and Poly Real Estate Group Co Ltd , up 3.7 percent.

Large cap banks recorded steady gains as some investors bet that strong earnings from the sector would help their shares resume the upward trend seen since the start of the year.

Bank of China Ltd , which is expected to report results this Friday, rose 0.6 percent. Larger rival Industrial & Commercial Bank of China Ltd was up 0.9 percent, providing the biggest boost to the benchmark.

HK WEAK AS EARNINGS WEIGH

With last week's volatility in the aftermath of Japan's massive earthquake easing, the focus has shifted back to corporate profits with market players showing little tolerance for weak earnings.

China Coal Energy Co Ltd , which reported 2010 earnings that fell well short of market estimates, slumped 7.6 percent on more than four times the average 30-day traded volume.

"Company earnings are likely to dominate trading in the short-term and shrinking volume in Hong Kong, China and even the US shows there's some caution out there" said a head trader at a Japanese bank in Hong Kong.

According to Thomson Reuters Starmine, about half of the companies on the Hang Seng Index had reported annual results as of Tuesday's close with only 41 percent of those beating or meeting market expectations.

China Life Insurance Co Ltd also took a hit, dropping 2.2 percent, after company reported a fall in fourth-quarter earnings.