Chinese manufacturing activity picked up pace to a three-month high in October, a private survey showed on Thursday.
The closely-watched HSBC's China flash Purchasing Managers' Index (PMI) inched up to 50.4 from a final reading of 50.2 in September, beating the consensus forecast for 50.3 and staying above the 50 mark which separates expansion from contraction.
The Australian dollar was little changed against the greenback on the news, and both the Shanghai Composite and Hang Seng indices remained in the red.
"The headline number has gone up, above consensus so we could probably be reasonably cautious about the economy and be okay with the idea that the economy is stabilizing," Jonathan Garner, emerging market equity strategist at Morgan Stanley told CNBC.
But a breakdown of the data showed output falling to a five-month low of 50.7, while new orders at home and abroad slowed.
The key employment component also shrank for a 11th consecutive month, stoking speculation of further stimulus from policymakers. Chinese authorities have repeatedly indicated their willingness to tolerate slowed economic growth as long as the job market remains stable.