China Stocks Face Volatility Ahead of PMI Report

China stocks may see volatile trading on Thursday, ahead of PMI data due out Friday.

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Wednesday saw the benchmark Shanghai Composite slip 0.21 percent to 2384.67, with turnover down 20 percent from Tuesday.

Market Factors:

The state planning agency says it will soon release regulations to open the logistics sector to private capital. Meanwhile, Chinese reports say FedEx and United Parcel Service are expected to receive licenses for express deliveries as early as Friday.

Securities regulators say they will try to even out initial public offering approvals for the Shanghai and Shenzhen bourses. Priority will be given to listing candidates from western China. The IPO pipeline now has almost 700 companies.

Stocks to Watch:

Strategic Industry Stocks - The Chinese cabinet approved the 12th five-year plan for seven strategic industries: alternative fuel cars, biotechnology, environmental and energy-saving technologies, alternative energy, advanced materials, new-generation information technology, and high-end equipment manufacturing.

—By Cheng Lei, CNBC Asia Pacific