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SHANGHAI: China stocks closed slightly higher on Tuesday after a sharp rally in the previous session on the back of a truce in the Sino-US trade war, as investors come to terms with the fact that the relationship between the two countries remains tense, while China's economy continues to face downward pressure.
The blue-chip CSI300 index rose 0.2 per cent, to 3,267.71, while the Shanghai Composite Index gained 0.4 per cent to 2,665.96.
US President Donald Trump and Chinese President Xi Jinping on Saturday agreed to a ceasefire, holding off on imposing more tariffs for 90 days starting Dec.
1 while they negotiate a deal to end the dispute following months of escalating tensions.
Washington disclosed the 90-day truce period, but Beijing didn't mention it, nor did Chinese media.
After studying the news release by the US government, which carries more details, brokerage Zhongtai International said that "US demand on China didn't actually change", but local media reports fanned optimism in China's stock market.
In addition, "macro data shows China's economy still faces downward pressure," the brokerage said.
The CSI300 financial sector sub-index was higher by 0.04 per cent, the consumer staples sector up 0.1 per cent, the real estate index down 2.03 per cent and the healthcare sub-index up 0.9 per cent.
The smaller Shenzhen index ended up 0.43 per cent and the start-up board ChiNext Composite index was higher by 0.434 per cent.
Around the region, MSCI's Asia ex-Japan stock index was weaker by 0.27 per cent, while Japan's Nikkei index closed down 2.39 per cent.
At 07:20 GMT, the yuan was quoted at 6.8425 per US dollar, 0.62 per cent firmer than the previous close of 6.8855.
The largest per centage gainers on the main Shanghai Composite index were Shenzhen Geoway Co Ltd, up 10.14 per cent, followed by Shandong Hiking International Co Ltd, gaining 10.08 per cent, and Zhonglu Co Ltd, up by 9.99 per cent.
The largest per centage losers on the Shanghai index were Xinjiang Winka Times Department Store Co Ltd, down 7.66 per cent, followed by Wuhan Hanshang Group Co Ltd , losing 7.52 per cent, and Junhe Pumps Holding Co Ltd , down by 6.28 per cent.
