Mainland China share market trimmed early gains to finish session marginally higher on Thursday, 01 June 2023, even after a private report showed Chinese manufacturing surprisingly expanded last month. The Caixin/S&P Global manufacturing purchasing managers' index (PMI) rose to 50.9 in May from 49.5 in April, a stark contrast to a deeper contraction activity seen in the official PMI released on Wednesday.
At close of trade, the benchmark Shanghai Composite index edged up 0.00%, or 0.07 point, to 3,204.64. The Shenzhen Composite Index, which tracks stocks on China's second exchange, was up 0.45%, or 9.05 points, to 2,012.23. The blue-chip CSI300 index added 0.22%, or 8.33 points, to 3,806.87.
ECONOMIC NEWS: China Caixin Manufacturing PMI Returns To Expansion In May-Manufacturing business conditions in China improved for the first time in three months during May, according to latest PMI data. Production expanded at the quickest rate in nearly a year, supported by a fresh rise in overall new business amid reports of firmer client demand. This in turn contributed to increases in purchasing activity and stocks of inputs. At the same time, further improvements in supplier capacity helped to shorten average delivery times and ease cost pressures. Notably, input costs fell solidly in May, with firms often passing on savings to clients in the form of lower selling prices. However, business confidence around the 12-month outlook for output slipped to a seven-month low in May amid concerns over lingering global economic uncertainty. As a result, firms maintained a cautious approach to staff hiring, with employment falling again in May. The headline seasonally adjusted Purchasing Managers' Index? (PMI?) - a composite indicator designed to provide a single-figure snapshot of operating conditions in the manufacturing economy - picked up from 49.5 in April to 50.9 in May. Crucially, the latest reading was above the neutral 50.0 level to signal the first improvement in the health of the manufacturing sector since February.
CURRENCY NEWS: China's yuan firmed against the dollar on Thursday, despite softer official guidance fixing. Prior to market opening, the People's Bank of China set the midpoint rate CNY=PBOC at 7.0965 per U.S. dollar, weaker than the previous fix 7.0821. The spot rate is allowed to trade in a range 2% above or below the official fixing on any given day. In the spot market, the yuan CNY=CFXS was changing hands at 7.0974 at midday, 116 pips or 0.2% stronger than the previous late session close and 0.01% weaker than the midpoint.
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