Hong Kong shares produced a fourth-straight gain on Tuesday, powered by financial and energy stocks, but market turnover was sluggish ahead of a policy decision by the U.S. Federal Reserve.

Mainland Chinese markets also rose. The Shanghai Composite Index was up 0.9 percent with oil and coal majors strong after local Chinese media reported that Beijing could increase fuel prices as soon as this week.

The China Enterprises Index of the top mainland listings in Hong Kong climbed 1.2 percent. The Hang Seng Index closed up 1 percent at 21,339.7. It has now retraced about two-thirds of a 4.3 percent slide early last week.

Strength in the Chinese banking names is spurring gains in riskier assets as well. Investors are chasing gains, but it's still a very thin market, said Jackson Wong, vice-president for equity sales at Tanrich Securities.

China's biggest lenders, among recent laggards, were the top boosts to benchmark indices. Industrial and Commercial Bank of China (ICBC) gained 1.5 percent in Hong Kong and 0.2 percent in Shanghai.

Chinese oil majors were also solid after the mainland media reports on fuel prices. CNOOC Ltd gained 2.4 percent, while PetroChina Co Ltd advanced 1.6 percent in Hong Kong and 0.9 percent in Shanghai.

Macau casinos were outperformers, with traders citing an upgrade by Deutsche Bank analysts, who raised their projections for 2012 revenue growth in the sector from 20 to 25 percent.

They also upgraded earnings for all of the sector's six Hong Kong-listed stocks.

Among Deutsche's top picks, Wynn Macau Ltd soared 8.6 percent to a near-six month high, SJM Holdings Ltd jumped 6.3 percent while Galaxy Entertainment Group Ltd surged 6.2 percent in more than double its 30-day average volume.

EARNINGS, EARNINGS, EARNINGS

Investors also continued to reward firms reporting stronger-than-expected earnings, which also spurred gains in their respective sectors.

Chinese department store chain operator Golden Eagle Retail Group Ltd rose 5.4 percent after posting 2011 earnings late on Monday that beat expectations. Sector peer Sun Art Retail rose 4.3 percent.

Traders said the gains in good volume point to near-term strength in the consumer sector as investors seek value buys underpinned by a more robust growth outlook even at a time the Chinese economy is slowing.

Despite gaining 22.7 percent this year -- outperforming the 15.7 percent gain on the Hang Seng Index -- Golden Eagle is still trading at 20 times its forward 12-month earnings, an 18 percent discount to its historical median.

Chinese property developer Longfor Properties was up 6.1 percent to HK$11.44 after its 2011 earnings also topped expectations. Citi analysts reiterated their buy rating on the stock, raising their target price from HK$14.05 to HK$14.65.

Among companies expected to post earnings on Wednesday, Cathay Pacific Airways Ltd gained 1.3 percent, while Chinese internet giant Tencent Holdings ended up 0.3 percent.

Tencent tested a more than seven-month high, up more than 4 percent at one stage as it tracked gains in U.S.-listed peers after Youku.com said it would buy smaller rival Tudou Holdings Ltd in an all-stock deal worth more than $1 billion.

But then Tencent's gains were pared in the afternoon as investors remained wary of its earnings report due on Wednesday.