“Some investors … believe the virus outbreak will only affect the market for one to three months,” said Everbright Sun Hung Kai’s wealth management strategist Kenny Wen, adding that Hong Kong’s 4.2 per cent plunge on Monday had been oversold. “They plan to bottom fish, [now that] the Hang Seng Index dropped 1,700 points in just two days.”

Hong Kong’s benchmark Hang Seng Index closed 1.4 per cent higher, its first day of gains in three, while the H-shares index advanced 1.7 per cent. Of the 50 constituents on the Hang Seng, 42 stocks advanced.

Alibaba Group Holding, Asia’s largest company by capitalisation and owner of South China Morning Post, gained 3 per cent, recovering some of the losses from a day earlier. Tencent Holdings, China’s largest games publisher and the biggest component on the Hang Seng, advanced by 1.5 per cent, contributing to 11 per cent of the benchmark index’s gains.

The stock markets in mainland China also advanced, as the number of new coronavirus cases eased. China announced only 19 new confirmed cases overnight for the entire country, the lowest daily tally since January 18, a positive turn of events that prompted the Chinese president to make his first visit to the epicentre of the disease.

As many as 80,735 people were confirmed to have caught the coronavirus in mainland China, with a death toll of 3,119, or 72 per cent of worldwide infections, according to World Health Organisation’s data.

The CSI 300 index, which tracks performance on both the Shanghai and Shenzhen exchanges, rose 2 per cent. The Shanghai Composite Index advanced by 1.7 per cent while the Shenzhen Composite Index on China’s Silicon Valley rose 2.3 per cent.

“The virus shock’s impact is likely to be large and sharp, but we believe investors should be level-headed, take a long-term perspective and stay invested,” BlackRock Investment Institute said in a research note to investors. “The economy is on more solid footing and, importantly, the financial system is much more robust than it was going into the crisis of 2008.”

Infographic: All you need to know about the global coronavirus outbreak

Kweichow Moutai, the world’s most valuable liquor distiller, advanced 3.7 per cent. Shares of companies that are involved in 5G telecommunications network and services advanced, while the makers of face masks and flu-related medication fell.

Overnight, US stocks plunged, with the Dow Jones Industrial Average closing down 2,013 points, or 7.8 per cent, in its single-day biggest point drop ever on crashing oil prices and coronavirus pandemic fears.

Sentiment in Hong Kong improved on Tuesday morning after the Dow Jones futures rose 600 points on a promise by US President Donald Trump to roll out what he called “major” economic announcements and confidence-boosting measures such as a payroll tax cut to offset coronavirus economic damage. Almost 600 people have caught the Covid-19 pathogen in the US, where 24 people have died.

“If we are indeed entering structural bear markets across the world, we will see plenty of these false dawns along the way,” said OANDA’s Asia-Pacific senior market analyst Jeffrey Halley. “A payroll tax relief in the US will not single-handedly save the economy from a recession.”

Shares jumped in Tokyo, pushing the Nikkei 225 index higher by almost 1 per cent. Stocks rose in Taipei, reversing from earlier declines, to close the day 0.2 per cent higher.

Markets advanced in Singapore, Kuala Lumpur, Jakarta, Bangkok and Sydney, as traders dove back in to seek out bargains.