China Market rebounds on record-setting factory data

Mainland China share market advanced to an eight-month high on Wednesday, 01 March 2023, as the release of stronger-than-expected economic data pointed to a recovery in the second largest economy in the world, sparking risk-on sentiment.

At close of trade, the benchmark Shanghai Composite Index advanced 1%, or 32.74 points, to 3,312.35. The Shenzhen Composite Index, which tracks stocks on China's second exchange, added 1.01%, or 21.73 points, to 2,163.82. The blue-chip CSI300 index added 1.41%, or 57.48 points, to 4,126.94.

Mainland China market commenced trading with firm footing, as strong manufacturing and non-manufacturing PMIs indicated that an economic recovery in the Asian giant was gaining momentum after the country relaxed most of its anti-COVID measures in January.

 

ECONOMIC NEWS: China Manufacturing PMI Rebounds to Expansion in February--The manufacturing sector in China moved back into expansion territory in February, the latest survey from Caixin revealed on Wednesday with a PMI score of 51.6. That's up from 49.2 in January, and it moves above the boom-or-bust line of 50 that separates expansion from contraction. The non-manufacturing PMI also gained in February, to 56.3, well above than the prior month's reading of 54.4. Strength in both manufacturing and non-manufacturing activity saw China's composite PMI jump 56.4 in February - its fastest pace in over three years.

CURRENCY NEWS: China's yuan strengthened against the dollar on Wednesday 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 6.94 per U.S. dollar, firmer than the previous fix 6.9519. In the spot market, the yuan CNY=CFXS was changing hands at 6.9274 at midday, 61 pips stronger than the previous late session close and 0.18% stronger than the midpoint.

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