China's factory activity steady in May

To be sure, the official National Bureau of Statistics survey on Tuesday showed the PMI for small enterprises reached its highest level since February 2012 at 51.0, from 50.0 in April, but their performance still lagged that of bigger firms.

Markit's Purchasing Managers' Index (PMI) of manufacturing companies stood at 55.4 in May, up from 54.5 in April.

China's manufacturing and services sectors expanded at a solid pace in May thanks to robust construction and infrastructure investment.

The Caixin China Manufacturing PMI is based on data compiled from monthly replies to questionnaires sent to purchasing executives at more than 400 manufacturing companies.

Separately, South Korea's central bank survey on local manufacturers also showed more optimism for future business conditions, with the June business survey index rising to more than three-year high.

Equipment manufacturing, high-tech manufacturing and consumer goods manufacturing continued robust growth, with the sub-indices all registering above 52, indicating the increasingly important roles they play in the manufacturing sector.

It said the rate of contraction was faster than the series average, with panellists generally linked lower production to weaker client demand.

"China's economy is changing into a trend of stabilisation from a momentary spike and drop", said Mr Zhang Liqun, an analyst with the China Logistics Information Centre, in a statement.

The government is, however, still targeting economic growth of around 6.5 per cent this year, down from 6.7 per cent in 2016.

Earlier in Australia, first quarter private capital expenditure rose 0.3%, below the 0.8% gain seen quarter-on-quarter and retail sales for April gained 1.0%, beating a 0.3% increase expected month-on-month.

At a different industry event Wednesday, Bank of America CEO Brian Moynihan said second-quarter trading revenue will fall 10 percent compared to a year ago. "The degree of positive sentiment was relatively muted, however", he said.

  • Leroy Wright