China said it has talked with countries downstream about its new dam project in Tibet, a massive undertaking that will affect a key source of water for India and Bangladesh.

The investment is set to benefit hydropower plant and grid equipment makers, but some analysts warn that market enthusiasm may wane soon.

China stocks closed at an eight-month high on Tuesday, while Hong Kong shares extended gains to a multi-year peak, driven by construction and power firms after work began on a major dam project in Tibet,