China stocks extend rebound amid hope of more support

• China equities trades in positive territory on Wednesday amid the USD's softness.
• Chinese stock markets extend the rally in the hope of more support from the Chinese government. 
• Investors await the Chinese Consumer Price Index (CPI), Producer Price Index (PPI), and Reserve Bank of India’s (RBI) rate decision on Thursday.

China stocks edged higher on Wednesday as investors hope for additional support from Chinese authorities to reverse a recent sell-off in the country's equities. Furthermore, the weaker US dollar (USD) and lower US bond rates boost Asian markets.

At press time, China’s Shanghai was up 0.95% to 2,815, the Shenzhen Component Index rose 2.60% to 8,670, Hong Kong’s Hang Sang dropped 0.22% to 16,101, South Korea’s Kospi was up 0.96%, Japan’s Nikkei was down 0.15%, and India’s NIFTY 50 gained 0.14% to 21,957. 

Chinese policymakers were also meeting with President Xi Jinping to discuss more supportive measures, while China’s securities regulator said it will encourage more state-backed funds to buy into local markets.

Chinese officials were also meeting with President Xi Jinping to discuss more supporting measures, and China's securities regulator indicated it will encourage more institutional investors, such as mutual funds, state pension funds, and insurers, to enter the stock market. 

It’s worth noting that the Chinese and Hong Kong stock markets have wiped out around $6.1 trillion in market value from their previous highs in February 2021, as of Monday, amid the fear of a property crisis in the second world’s largest economies.

In New Zealand, the Unemployment Rate in the fourth quarter (Q4) rose to 4.0% from 3.9% in the third quarter, better than the market expectation of 4.2%. The Employment Change arrived at 0.4% in the fourth quarter versus -0.2% in the previous reading, above the market consensus of a 0.3% rise. This report is crucial for the Reserve Bank of New Zealand (RBNZ). 

Investors will keep an eye on the Chinese Consumer Price Index (CPI) and Producer Price Index (PPI) on Thursday. The CPI inflation data is expected to drop 0.5% YoY in January, while the PPI figure is projected to decline 2.6% YoY in the same reported period. Furthermore, the Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) will announce its interest rate decision on Thursday at 4.30 GMT.