Shares in Shanghai and Hong Kong rose on Thursday, joining other Asian markets in cheering upbeat economic data from the United States and China, with auto shares among the top gainers.
China's key Shanghai Composite Index closed up 1.25% at 2,655.776 points. SAIC Motor Corp and other automakers gained after surprisingly robust car sales.
Analysts expect 2,700 points, a level the index has repeatedly failed to breach over the last month, to continue to offer short-term resistance.
Investor caution ahead of Chinese economic indicators set to be released in the next two weeks, and uncertainty over the severity of property controls in the mainland's frothy housing market were likely to keep the index trading narrowly in the near term, they said.
"Strong global markets lifted A shares today," said Xu Yinhui, analyst at Guotai Junan Securities in Shanghai, adding that while overall sentiment had improved, investor uncertainty was likely to curb more robust gains.
"Property prices have not come down, transaction volumes are very high. With property policies uncertain and the index moving narrowly, investors will focus on specific sectors that look attractive," he said.
China's car sales in August rose 59.3% from a year earlier, bouncing surprisingly higher after sluggish sales in the summer months, helped largely by Beijing subsidies for fuel-efficient models.
Chinese carmaker Anhui Jianghuai Automobile Co rose 5.9%, while Huayu Automotive Systems Co gained 7.5%.
Shenzhen listed automobile manufacturer FAW Car Co jumped by its 10% daily limit.
Turnover of Shanghai A shares rose to 142 bln yuan from Wednesday's 138 bln yuan with gaining stocks outnumbering losers 826 to 69.
PING AN GAINS IN HONG KONG
Hong Kong shares rose for a second session, while the volume of trade increased as upbeat data helped restore investor confidence.
The benchmark Hang Seng Index ended up 1.19% at 20,868.82. Turnover rose to HK$ 66.1 bln ($8.5 bln), its highest in three weeks.
"People who have been cautious since last month might be starting to think that they have overdone their caution about a double-dip and that what we are really seeing is a slight slowdown in global growth," said Howard Gorges, vice-chairman at South China Financial Holdings in Hong Kong.
The session's most actively-traded stock, Ping An Insurance rose 2.7%. The world's second-biggest insurer has agreed to buy a further 32% of Shenzhen Development Bank, giving it a controlling stake in the Chinese lender.
The HSI is still below the 20-day moving average with first resistance seen at around 21,000. The upside could be sustained if the market broke this level, brokers said.
Carmaker Geely Automobile Holdings was up 4.3% and BYD Co was 4.9% higher.
Fashion retailer Esprit Holdings fell 3.1% to its lowest close in nearly two months, after reporting lower profits at the mid-day break. The stock had fallen as much as 5.2% right after the afternoon session started.
