Chinese shares climbed 1.6 percent on Tuesday after bargain hunters picked up big caps such as top Chinese carrier China Southern Airlines and Sinopec Corp. The benchmark Shanghai composite index closed at 1,207.164 points.
Southern Air, China's largest carrier by fleet size, closed up 2.9 percent at 2.84 yuan. Its shares had lost nearly 47 percent of their value so far this year, hammered by sky-rocketing jet fuel prices.
Top Asian oil refiner Sinopec gained 1.4 percent to 4.31 yuan. It had shed 4.1 percent since the beginning of the month, fluctuating alongside crude oil price swings.
China United Telecommunications Corp Ltd, the smaller of the country's two cellular carriers, was the day's most actively traded counter. It surged 2.25 percent to end at 2.73 yuan. It had fallen 2.6 percent since September 1.
Analysts expect the rally to fizzle out, with a round of corrections on the way.
"We'll continue to see a yo-yo pattern, with the index unlikely to top 1,300 in the near term given liquidity pressure," said Zhang Yong, an analyst with Great Wall Securities.
Beijing in April resurrected an effort to convert over $200 billion state-owned shares that have weighed on markets for years into freely floated shares.
That pushed the benchmark index to eight-year lows as investors fretted over potential dilution of their holdings amid a deluge of shares.
The index, lifted slightly by the yuan revaluation on July 21, is down nearly 5 percent so far this year.
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