Toss the peaches and blueberries in the sugar in a punch bowl or large pitcher. Let stand for 20-25 minutes, tossing the fruit occasionally.
Stir in the wine, tequila, schnapps and fresh juices.
Float the sliced oranges, lemons and limes on top.
Fill drinking glasses with crushed ice. Fill 3/4 full with sangria. Top with sparkling water.