Stocks on the Chinese mainland rose on Tuesday, led by energy producers and property developers, after their biggest one-day decline in four weeks dragged valuations to a near-record low.

China Oil HBP Science & Technology Co, which develops oil and gas fields, surged 10 percent after National Business Daily reported the government may start second-round shale gas auctions next month.

An investor at a trading venue in Haikou, Hainan province on Aug 14, 2012. [Photo/China Daily]

China Vanke Co led gains for developers after falling by more than 6 percent in the previous two days on concern property curbs will hurt earnings.

CITIC Securities Co, the nation's biggest listed brokerage, dropped to a six-month low, as the Securities Times reported the company had denied speculation of "huge" losses on overseas investments.

The Shanghai Composite Index rose 0.3 percent to 2,142.52 at the close, after falling 1.5 percent on Monday. The index trades at a price-to-book ratio of 1.61 times, compared with the all-time low of 1.58 set on July 31, according to data compiled by Bloomberg. The CSI 300 Index added 0.2 percent to 2,357.02.

"Valuations are pretty low and that's why some investors are willing to buy shares now, betting on a short-term rebound," said Wu Kan, a Shanghai-based fund manager at Dazhong Insurance Co, which oversees $285 million. "The whole economic picture is still bleak."

The Shanghai Composite tumbled 13 percent through Tuesday from this year's high on March 2 on concern the economic slowdown is deepening. The index is valued at 9.6 times estimated profit, compared with the 17.4 average since Bloomberg began compiling the data in 2006.

"The market is oversold and is extremely cheap," said Liu Yang, chairwoman of Atlantis Investment Management Ltd, in an interview with Bloomberg Television on Monday.

Vanke, the nation's biggest property developer, added 1.9 percent to 8.58 yuan. The stock retreated 6.4 percent over the past two days after a newspaper controlled by the central bank said authorities want to keep funding for property tight.

Poly Real Estate Group Co, the second-biggest, rose 2.9 percent to 10.49 yuan. China Merchants Property Development Co, the third-largest, gained 2.7 percent to 20.65 yuan.

China may start second-round shale gas auctions next month, National Business Daily reported, citing Zhang Dawei, deputy director of oil and gas research at the Ministry of Land and Resources.

China Oil HBP jumped 10 percent to 10.53 yuan. Kingdream Public Co, which makes oilfield machinery, climbed 8.6 percent to 19.20 yuan. China Oilfield Services Ltd, the drilling unit of the nation's largest offshore oil producer, added 3.2 percent to 17.34 yuan.

China is estimated to hold the world's biggest shale-gas resource with 25.1 trillion cubic meters of recoverable reserves, Zhou Jiping, president of PetroChina Co, said at a conference in Kuala Lumpur in June.

PetroChina has drilled shale-gas wells in Sichuan province, which shows good prospects, he said.

China Merchants Securities Co declined 1.8 percent to 10.08 yuan after it said first-half net income fell 36 percent from a year earlier.

Chinese publicly traded companies are required to release first-half earnings results in July and August. Of the 888 companies in the Shanghai Composite, the 216 that reported second-quarter earnings had an average 0.6 percent profit decline, according to data compiled by Bloomberg. Their profit rose 2.8 percent in the first quarter, the data showed.

China's economy will slow "considerably", Marc Faber, the publisher of the Gloom Boom & Doom report, told Tom Keene and Ken Prewitt in a "Bloomberg Surveillance" radio interview on Monday.

"The growth rate we had in the last 10 years, which was around 10 percent annually, is going to slow down considerably," Faber said. "I would rather wait to buy Chinese stocks until we see the result of the stimulus packages."

The Hang Seng China Enterprises Index of Chinese companies traded in Hong Kong added 0.8 percent. The Bloomberg China-US 55 Index, the measure of the most-traded US-listed Chinese companies, was unchanged in New York on Monday.

Thirty-day volatility in the Shanghai index was at 14.3 on Tuesday, compared with this year's average of 17.5. About 6.6 billion shares changed hands in the gauge on Tuesday, 18 percent lower than the daily average this year.