optimism thatChina's economy is doing better, although strong technical resistance capped gains for a second day.

Chinashares were tepid ahead of the release of more China data but financialstockswere strong on hopes that regulators will allowbanksto issue preferred shares.

At midday, theHang SengIndex was up 0.6 percent at 22,885.39, while theChinaEnterprises Index of the top Chinese listings in Hong Kong rose 1 percent.

The CSI300 was flat, while the Shanghai Composite Index was up 0.2 percent at 2,217.52 points, after Shanghai shares had their best day in nine months on Monday.

Globally, most stock markets have risen, boosted by encouraging Chinese August data released on Sunday and Monday.

"The Chinese data showed that the downside risk in China seemed to be removed and that's why we see China-related stocks have improvement in sentiment," said Castor Pang, analyst at Core Pacific-Yamaichi Securities in Hong Kong.

If the Hang Seng remains positive, Tuesday will be its fifth straight day with a gain.

"But the Hang Seng index is not strong enough to break the resistance at around 23,000 level as investors remained cautious about the U.S. markets," Pang said, referring to concerns about a coming reduction in the U.S. Federal Reserve's massive stimulus.

Beijing is due to release monthly data for industrial output, retail sales and urban investment later on Tuesday. Money supply and loan growth data is also expected this week.

Chinese banks extended gains after China's central bank chief expressed his supports for issuing preferred stocks in China.

Zhou Xiaochuan, China's central bank chief, wrote in an article on its website late on Monday that he supported permitting preferred stocks in China. He said that such shares can help avoid intervention by authorities in companies' operations.

Shanghai Pudong Development Bank, which surged the maximum allowed 10 percent on Monday, rose 3.6 percent on Tuesday. In Hong Kong, Agricultural Bank of China (AgBank) jumped 1.4 percent.

Chinese shippers were again strong, supported by resurgent freight rates as well as hopes that companies in Shanghai's new free-trade zone may benefit from policy support.

China Shipping Container Lines (CSCL) gained 9.9 percent in Shanghai and 2.7 percent in Hong Kong. China Shipping Development rose 3.5 percent in Hong Kong. The stock has climbed more than 58 percent since a mid-June trough.

Shares in Yanzhou Coal Mining Co Ltd jumped 8.1 percent after the company said its controlling shareholder Yankuang Group Co Ltd increased its stake in the company by acquiring 97.72 million H shares in Hong Kong.