Chinese shares closed with losses as sentiment remains dampened over weak trade data, while investors are also cautious over bets that the US interest rates will be cut by up to half a percentage point.

The Shanghai Composite Index fell 0.5%, or 19.55 points, to finish Tuesday's trade at 3,807.29. The Shenzhen Component Index dropped 1.2%, or 156.25 points, to 12,510.60.

Official data yesterday showed both export and import data weakened in August as the renewed trade truce lost its momentum. Exports rose 4.4%, while imports climbed 1.3%, both lower than figures a month ago.

Meanwhile, some analysts, including those in FedWatch and Standard Chartered, predict that the Federal Reserve will trim rates by between 25 basis points and 50 basis points, or from 0.25 percentage point to 0.50 percentage point. The Fed will announce the results next week.

In corporate news, both of Shanghai Highly's (SHA:600619, SHA:900910) A and B shares dipped 10% after a unit of Shanghai Electric Group (HKG:2727, SHA:601727) said it will divest part of its holdings in the Chinese manufacturer of components for white goods and energy vehicles.

Suzhou Kingswood Education Technology (SHE:300192) dropped 4% as its controlling shareholder, Wu Xianliang, plans to dispose of up to 1% of his holdings in the company.