HONG KONG (Dow Jones)--Hong Kong shares ended lower Thursday, reversing early gains, due to concerns Beijing will adopt more tightening measures in the near future.

The blue-chip Hang Seng Index ended 31.65 points, or 0.2%, lower at 21,716.95 after gaining as much as 1.1% in the morning. It traded between 21,707.10 and 21,988.93.

Market volume fell to HK$84.20 billion from HK$97.62 billion Wednesday.

Analysts said they expect the benchmark index to remain volatile in coming sessions after Beijing raised the amount banks must keep as reserves, and pegged psychological support at 21,000.

"China banks and developers may still witness some selling pressure ahead, as China policy risks still prevail," said Linus Yip, a strategist at First Shanghai Securities, who said he expects the local index to stay in a 21,000-23,000 range in the near term.

However, Goldman Sachs analyst Thomas Deng said the reaction to the earlier-than-expected reserve requirement ratio hike could be overdone, as it probably suggests China's underlying growth momentum is stronger than policy makers had anticipated.

"The market could remain volatile in the near term due to the lingering concerns on tightening," he said. "However, we see any further market weakness as attractive buying opportunities to gain exposure to China's intact growth story."

Financial companies extended losses after a broad sell-off in the previous session following the announcement of the hike by China's central bank after the markets closed Tuesday.

China Construction Bank slid 1.0% to HK$6.11 after it fell 3.9% in the previous session, and ICBC ended down 1.5% at HK$5.84 after dropping 3.6%. Bank of China fell 1.0% to HK$3.95 after it tumbled 3.6% Wednesday.

ZTE Corp. fell 2.0% to HK$50.65 after the Chinese telecommunications equipment vendor reported it planned to raise HK$2.62 billion from a share sale for general working capital.

Bucking the trend, Chinese flag carrier Air China surged 7.5% to HK$6.30 after it said Wednesday it carried 3.25 million passengers in December, up 14.1% from a year earlier.

-By Yvonne Lee, Dow Jones