China Market rises on strong service PMI data

Mainland China share market finished session slightly higher on Friday, 03 March 2023, as risk sentiments underpinned after a private report showed services activity in China expanded last month. Meanwhile, market sentiments underpinned by expectations Beijing will set an ambitious growth target for this year. On Sunday, Premier Li Keqiang is due to deliver the 2023 government work report to the annual parliamentary session, which will include key economic goals and policy priorities. At close of trade, the benchmark Shanghai Composite Index was up 0.54%, or 17.74 points, to 3,328.39. The Shenzhen Composite Index, which tracks stocks on China's second exchange, fell 0.02%, or 0.51 point, to 2,152.13. The blue-chip CSI300 index added 0.31%, or 12.81 points, to 4,130.55.

ECONOMIC NEWS: The Caixin/S&P Global services purchasing managers' index (PMI) rose to 55.0 in February from 52.9 in January, a back-to-back monthly increase in activity after the government abruptly dismantled anti-virus measures in December. The 50-point mark separates expansion and contraction in activity on a monthly basis.

Caixin/S&P's composite PMI, which includes both manufacturing and services activity, rose to 54.2 in February from 51.1 a month earlier, marking the quickest expansion since June.

CURRENCY NEWS: China's yuan appreciated against the dollar on Friday, despite weaker 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 6.9117 per dollar, 309 pips or 0.45% weaker than the previous fix of 6.8808. In the spot market, the yuan CNY=CFXS was changing hands at 6.9060 at midday, 133 pips firmer than the previous late session close.

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