HONG KONG, March 22 (Reuters) - Hong Kong shares finished higher on Tuesday in relatively thin trading volume, supported by banks ahead of earnings announcements later this week and oil plays on high oil prices.
The benchmark Hang Seng Index ended up 0.76 percent at 22,857.90, while the China Enterprises Index climbed 1.09 percent.
The Shanghai Composite Index closed up 0.34 percent.
HIGHLIGHTS
* Chinese banks traded higher as earnings come into focus, with Bank of China Ltd the first to report on Thursday. In a note released on Tuesday, Barclays Capital tipped Bank of China and Industrial and Commercial Bank of China Ltd (ICBC) to be the top performers. ICBC rose 1 percent, while Bank of China gained 0.7 percent on the day.
* Oil counters outperformed, with CNOOC Ltd up 3 percent and PetroChina Co Ltd gaining 2.6 percent. High oil prices supported sentiment ahead of an anticipated spike in demand to compensate for the loss of nuclear capacity and on continuing geopolitical tensions in North Africa and the Middle East.
* Hong Kong property issues extended their recent bearish trend. Rising inflation and property prices, along with Hong Kong banks beginning to lift mortgage rates, were looming policy risks that were seen as not yet priced into valuations compared their China counterparts, analysts said. Hang Lung Properties Ltd and Sun Hung Kai Properties Ltd were among the top losers, each shedding 0.9 percent.
* China Taiping Insurance Holdings Co Ltd jumped 9.67 percent after Morgan Stanley upgraded its rating. On Monday, the company announced a 172 percent jump in 2010 profit.
DAY AHEAD
* Continuing developments in Japan, Libya and other parts of the Middle East and North Africa will continue to factor.
* Volumes were low on Tuesday as investors remained cautious in the face of multiple geopolitical risks in Japan, North Africa and the Middle East. In the short term, analysts see upside resistance at 23,000, with the 200-day moving average at 22,377.93 providing downside support. Rangebound, speculative trading will continue to dominate until there is more clarity.
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