Chinese shares hit a new record high on Tuesday, as investors felt confident in the gaining prospects of energy and property shares.

The Shanghai Composite Index gained 0.9 percent to 4,110.38, topping 4,100 for the first time. The Shenzhen Component Index climbed 1.13 percent to 12,407.83, also a new high.

The two bourses saw a fresh record combined turnover of 380.5 billion yuan (49.4 billion U.S. dollars).

The rise, led by property and energy stocks, was also propped up by bank shares which stopped declining Tuesday.

The Special Treatment (ST) stocks, which are shares of companies that have failed to earn money two years running or have been fingered for false accounting, were favored by investors on Tuesday, triggering worries in market stability.

The blue chips which had been undervalued such as coal shares maintained strong momentum on the second trading day of this week.

An analyst from Hui Yang Investment suggested investors to choose currently low-priced blue chips to avoid risks and seize opportunities in the bullish market.

Expectations for a stronger yuan remained the drive of Tuesday's upturn which would attract more overseas capital into the robust mainland market, said analysts.

Fan Gang, one of the policy advisors of China's central bank, said the adjustments announced last week targeted money supply and excessive liquidity and at present the government would not bring forward new regulations to interfere in the stock market.

On Friday, the Chinese central bank said it would widen the daily trading band for the yuan, allowing it to rise or fall as much as 0.5 percent each day from the previous day's close, up from the previous 0.3 percent limit.

Meanwhile, the central bank raised one-year deposit and loan interest rates by 0.27 and 0.18 percentage points respectively, to 3.06 percent and 6.57 percent as of May 19.

Source:Xinhua