SHANGHAI: China stocks closed higher on Tuesday, supported by heavyweight financials firms as investors sought opportunities in cheap shares, though persistent Sino-US tensions weighed on the market.
The blue-chip CSI300 index rose 0.5%, to 4,694.39, while the Shanghai Composite Index added 0.7% to 3,316.42, snapping a four-day losing streak.
The tech-heavy start-up board ChiNext climbed 0.4%, while the STAR50 index slipped 0.9%.
Heavyweight financial firms, including banking and securities companies, led the rebound.
The CSI300 banks index rallied 1.6%, while the CSI SWS securities index firmed 2.1%.
There are no foundations for a continued sharp correction in the A-share market as valuations are low for many cyclical sectors, said analysts.
The CSI300 consumer staples index lost 1.3% on Tuesday, but has still gained nearly 50% this year.
Simmering Sino-US tensions also weighed on sentiment.
Banks will witness a recovery in valuations in the fourth quarter, as there will be less pressure on them to surrender profits due to an economic recovery in China, Northeast Securities wrote in a report.
A continued improvement in the operating environment due to Beijing's deepening capital market reforms is the most significant catalyst for the country's securities companies whose valuations remain at decade-low levels, analysts at Shanxi Securities said in a report.
Investors continued to pull out of high-flying consumer firms on worries over their lofty valuations following stellar gains.
US President Donald Trump on Monday again raised the idea of de-coupling the US and Chinese economies, suggesting the United States would not lose money if the world's two biggest economies no longer did business.
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