* HSI +1.2 pct, H-shares +1.8 pct, CSI300 +1.3 pct
* Chinese carmakers up on more policy support for 'green'
* Aluminum Corp hits 7-month high on high global prices
* Property developers extend rally on more easing
(Updates to midday)
By Grace Li
HONG KONG, July 22 Hong Kong's benchmark index
reached its highest level in more than seven months early on
Tuesday, leading gains in Asia, as recent fund inflows pushed up
the territory's blue-chip stocks.
Also pushing up the index were moves by investors to cover
their short positions in the absence of negative news from
China shares unexpectedly posted solid gains ahead of a
deluge of initial public offerings, with volumes robust as
sectors from banking to property all strengthened.
By midday, the CSI300 of the leading Shanghai and
Shenzhen A-share listings rose 1.3 percent to its highest since
June 16, while the Shanghai Composite Index was up 1.0
percent at 2,074.30 points.
The Hang Seng Index gained 1.2 percent at 23,667.46
points, its highest since Dec. 11. The China Enterprises Index
of the top Chinese listings in Hong Kong climbed 1.8
percent. If that gain remains, the index will have its best day
in four months.
"U.S. stock prices are reasonable but a bit more expensive,
so more and more funds are looking for other opportunities,"
said Larry Jiang, chief strategist at Guotai Junan International
in Hong Kong.
"Hong Kong can be a target. As long as investors think the
companies have good results or fundamentals, money will flow
in," he added.
Among top index boosts on the Hang Seng, Tencent Holdings
added 1.7 percent, partly lifted by peer Baidu's
record high close in New York.
Chinese carmakers jumped again, riding another policy
announcement on Monday about promoting electric and plug-in
hybrid cars. The sector had seen solid gains recently, helped by
a tax exemption and a requirement for government officials to
use more "green" vehicles by 2016.
BYD surged 5.8 percent in Shenzhen and
3.7 percent in Hong Kong. SAIC Motor Corp rose 3.1
percent to its highest since March 2013.
Some metal firms soared as London zinc rose for a second
session to hit a near three-year high on Tuesday and aluminium
touched a new 16-month peak.
Aluminum Corp of China jumped 5.6 percent and
touched a seven-month high while Yunnan Luoping Zinc &
Electricity surged the maximum allowed 10 percent.
Chinese property developers extended gains after media
reports said more cities have relaxed restrictions on house
purchases. Poly Real Estate added 2.8 percent and
China Vanke 2.2 percent.
Mid-sized banks, which are more reliant on short-term
interbank funding, were the biggest CSI300 boosts, with China
Merchants Bank and Industrial Bank both
up more than 2 percent.
China's central bank abstained from open market operations
on Tuesday, a move to help liquidity as money market rates crept
up on IPO demand and corporate tax payments.
(Additional reporting by Saikat Chatterjee; Editing by Richard