China Market rebounds on growth optimism

Mainland China share market finished session notably higher on Tuesday, 28 February 2023, snapping four days losing streak, as investors opted to pick up stocks at reduced levels on expectation that an upcoming survey to show growth in Chinese manufacturing activity.

At close of trade, the benchmark Shanghai Composite Index advanced 0.66%, or 21.57 points, to 3,279.61. The Shenzhen Composite Index, which tracks stocks on China's second exchange, added 0.81%, or 17.21 points, to 2,142.08. The blue-chip CSI300 index added 0.63%, or 25.62 points, to 4,069.46.

Investors are closely monitor the upcoming economic data releases (such as China's official PMIs for February on 1 March, trade data on 7 March, inflation data on 9 March, and a series of activity data from retail sales, industrial production to urban fixed asset investment in mid-March) for more clues on the pace of China's economic recovery since Beijing reopened its borders and ditched its rigorous anti-COVID rules in December.

Also, investors would focus on the country's annual parliamentary gatherings- National People's Congress (NPC) on 5 March 2023, where officials will release growth targets and policies.

CURRENCY NEWS: China's yuan strengthened against the dollar on Tuesday inline with firmer mid-point fixing by China's central bank. Prior to market opening, the People's Bank of China set the midpoint rate CNY=PBOC at 6.9519 per U.S. dollar, firmer than the previous fix 6.9572. In the spot market, the yuan CNY=CFXS opened at 6.9515 per dollar and was changing hands at 6.9364 at midday, 69 pips firmer from the previous late session close.

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