The PMI far exceeded analysts' forecast of 50.5 and was the highest reading since April 2012, raising hopes that the economic recovery was getting back on track.
The strong PMI data reflected that the production and logistic disruptions related to the zero-COVID policy and massive infection dissipated quickly, noted Ken Cheung, chief Asian FX strategist, Mizuho Bank. "We had already been expecting a rapid near-term rebound, but the PMIs suggest that even our above-consensus forecast for GDP growth of 5.5% this year may prove too conservative," said Julian Evans-Pritchard, head of China economics at Capital Economics. The focus for the rest of the week will be on National People's Congress starting on March 4. Investors are on a wait-and-watch mode for policy signals, including this year's GDP growth target. Investors are trying to gauge how strongly the authorities are prioritizing a specific growth rate through the language used in the statements, said Aninda Mitra, head of Asia macro and investment strategy of BNY Mellon Investment Management. "They will also scrutinize the credibility of the accompanying macro and regulatory policies." The CSI telecom index added 4.7% after the Communist Party of China (CPC) Central Committee and the State Council rolled out a new plan on Monday to promote China's digital economy. China United Network Communications climbed 10.0%, China Mobile added 5.0%, while China Telecom gained 8.5%. In Hong Kong, tech giants listed in Hong Kong jumped 6.6%, their best single-day performance in almost three months. Tencent rose 7.3%, Alibaba rallied 6.2%, and Meituan gained 4.9%. Meanwhile, the HSI finance index was up 3.2%, properties added 2.8%, commerce and industry jumped 5.2%. (Reporting by Shanghai Newsroom; Editing by Sherry Jacob-Phillips and Uttaresh.V)
