SHANGHAI – Hong Kong shares tumbled on Tuesday following a one-day holiday, playing catch-up with falls on Wall Street.

The benchmark Hang Seng Index fell as much as 4.1 percent, before recovering some losses to end trading down 1.8 percent. The Hang Seng Tech Index slumped 3.2 percent.

“All eyes are on US stocks,” said Linus Yip, chief strategist at First Shanghai Group.

“If Wall Street keeps falling, it would definitely be a drag on global markets, including Hong Kong and China."

However, Yip points to signs that mainland money has been flowing into Hong Kong stocks over the past week due to bargain-hunting.

“Hong Kong shares have corrected much earlier than US stocks, so their valuation is much lower,” he said.

Hang Seng trades at less than 10 times earnings, compared with more than 20 for the S&P 500.

In the currency market, the Hong Kong dollar briefly touched 7.85 per dollar, the weak end of its trading band on Tuesday.