Stock markets in the Asia-Pacific region traded largely with gains on Tuesday, while the Hong Kong Stock Exchange drifted in the opposite direction following the news that Washington had blacklisted Tencent Holdings Ltd.

The US government labeled the Chinese tech giant a "military company" operating in the United States, further fueling the tensions between the two countries.

Hong Kong's Hang Seng plummeted 1.85% as shares of Tencent Holdings Ltd. tanked 7.33% to touch its lowest level since September.

Meanwhile, Japan's Nikkei 225 surged 2.01% and South Korea's Kospi gained 0.26%. Australia's S&P/ASX 200 rose 0.34%. In mainland China, the Shanghai Composite added 0.23% and the Shenzhen Composite climbed 0.93%.

The American dollar traded 0.07% higher against the Japanese yen, selling for 157.7340.