China shares close up as energy, renewable energy stocks shine

China shares edged up on Tuesday, led by energy and renewable energy stocks, while gains were capped as COVID-19 outbreaks and tensions with the United States weighed on sentiment. The blue-chip CSI300 index rose 0.2%, to 4,156.29, while the Shanghai Composite Index gained 0.3% to 3,247.43 points.

China shares edged up on Tuesday, led by energy and renewable energy stocks, while gains were capped as COVID-19 outbreaks and tensions with the United States weighed on sentiment.

The blue-chip CSI300 index rose 0.2%, to 4,156.29, while the Shanghai Composite Index gained 0.3% to 3,247.43 points. The Hang Seng index fell 0.2%, to 20,003.44, while the China Enterprises Index lost 0.4%, to 6,794.77 points.

** Energy stocks rose nearly 3%, with coal miners up 3.5%. ** The new energy sector climbed 2.2%, with photovoltaic firms surging 3.2% and new energy cars up 1.1%.

** Data showed China's overall passenger car sales in July jumped 20.1% from a year earlier to 1.84 million, and sales of electric cars accounted for 26.4% of the total and increased 117.3%. ** The Chinese army said on Tuesday it continued to hold military drills and exercises in the seas and airspace around the island of Taiwan, with a focus on blockades and resupply logistics.

** Defence shares added 2.2%. ** Semiconductors added roughly 1% after posting the biggest gains in two years last week, as House of Representatives Speaker Nancy Pelosi's visit to Taiwan heightened tensions with the U.S.

** "Sustained policy support and an improving macroeconomic environment are supportive of a gradual recovery in Chinese equities," Carlos Casanova, senior economist, Asia at UBP, said in a note. ** However, "that does not preclude potential downside risks, which are predominantly concentrated around China's 'Dynamic Zero-COVID' strategy," he added.

** China reported COVID outbreaks across the country on Tuesday, from growing clusters in tropical Hainan to Xinjiang in the west and new cases in far-flung Tibet. ** MSCI's broadest index of Asia-Pacific shares outside Japan was almost flat as investors eyed U.S. inflation data due on Wednesday that will likely yield clues to any further aggressive Federal Reserve rate hikes.

** Hong Kong may consider waiving extra stamp duty on homes for mainland Chinese buyers, Regina Ip, convenor of the government's advisory Executive Council told Bloomberg. ** Hong Kong's government, however, said there are no discussions to relax the property stamp duty.

** Shares of Hong Kong property developers ended higher, with New World Development Co and Sun Hung Kai Properties both up more than 2%.