However, market capped capped as the market awaited the Federal Reserve's policy meeting for more clues on the trajectory of U.S. monetary tightening. The Fed is widely expected to raise interest rates by 25 basis points later in the session, but Fed Chair Jerome Powell's news conference will hog the spotlight as traders gauge how long the Fed is likely to stay hawkish.
At close of trade, the benchmark Shanghai Composite Index advanced 0.9%, or 29.25 points, to 3,284.92. The Shenzhen Composite Index, which tracks stocks on China's second exchange, was up 1.45%, or 31.03 points, to 2,173.59. The blue-chip CSI300 index added 0.94%, or 39.07 points, to 4,195.93.
ECONOMIC NEWS: China's Caixin/S&P Global manufacturing purchasing managers' index (PMI) nudged up to 49.2 in January from 49.0 in December. This was the sixth straight month of drop in factory activity, amid sluggish operations after an abrupt shift in COVID policy.
The official PMI data released Tuesday showed that the manufacturing sector expanded for the first time in four months in January. The corresponding index climbed to 50.1 from 47.0 in December. The non-manufacturing PMI advanced sharply to 54.4 from 41.6 a month ago. The official PMI data released Tuesday showed that the manufacturing sector expanded for the first time in four months in January. The corresponding index climbed to 50.1 from 47.0 in December. The non-manufacturing PMI advanced sharply to 54.4 from 41.6 a month ago.
However, demand conditions remained relatively subdued but the pace of decline eased since December. New orders from abroad also contracted on weaker global demand. Purchasing activity dropped at the slowest pace in three months. Inventories of both pre- and post-production items declined at quicker rates as firms often made greater use of current stocks in light of muted customer demand.
Employment decreased further in January as staff resignations and absences due to COVID-19 illness weighed on headcounts. As a result, there was a renewed upturn in backlogs of work. On the price front, the survey showed that input costs increased at the fastest pace in seven months. On the other hand, selling prices dropped slightly as firms lowered prices to stimulate sales. Business confidence improved the most since April 2021 as manufacturers expect operations to return to normal.
CURRENCY NEWS: China's yuan appreciated 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 (PBOC) set the yuan's midpoint rate CNY=PBOC at 6.7492 per dollar, 112 pips or 0.17% firmer than the previous fix of 6.7604. In the spot market, the onshore yuan CNY=CFXS opened at 6.7503 per dollar and was changing hands at 6.7514 at midday, 17 pips firmer than the previous late session close.
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