However, market gains capped amid reports of surging infections after Beijing loosened its stringent COVID-19 rules in recent weeks. Sentiment turned cautious as infections reportedly spread fast in China, with funeral homes reporting a spike in demand for their services and hospitals now packed with patients.
At close of trade, the benchmark Shanghai Composite Index advanced 0.22%, or 7 points, to 3,123.52. The Shenzhen Composite Index, which tracks stocks on China's second exchange, added 0.06%, or 1.23 points, to 2,005.35. The blue-chip CSI300 index was up 0.13%, or 5.05 points, to 3,892.95.
China will facilitate the expansion of its fiscal policies in the year to help bring back the economy to its feet. These will include efforts to coordinate fiscal revenue, deficit and interest subsidies, Finance Minister Liu Kun told. Investors have been waiting for improvement in China's policies as the country grappled with COVID-19, supply shocks and weakening demand.
CURRENCY NEWS: The Chinese currency was up against the U.S. dollar on Wednesday, as China's central bank set a firmer midpoint rate. Prior to market opening, the People's Bank of China (PBOC) set the midpoint rate CNY=PBOC at 6.9131 per dollar, 344 pips or 0.5% firmer than the previous fix of 6.9475, the strongest since Sept. 15. In the spot market, the onshore yuan CNY=CFXS was changing hands at 6.8987 at midday, 147 pips firmer than the previous late session close.
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