While bad news are reeling around Chinese economy and its market, all is not truly at world's end.

Chinese manufacturing as measured by PMI while slumped to lowest in almost 2 years, services sector PMI has hit highest level in almost a year.

Caixin/Markit services PMI moved to 53.8 in July from 51.8 in June. This move points to not only some underlying momentum in Chinese domestic market, but a change in China's changing economic structure.

China's services sector grew in July at its fastest pace, indicating strong demand in domestic market. This is the biggest since August last year, when the index rose by 4.1 points.

New orders rose at solid pace and services firms gained new customers.

Services sector continue to provide employment to the economy.

This is a very welcome move since June's sharp fall, wiped out almost all its gain till May this year.

Growth in the services sector are not only provides relief at a time when manufacturing has taken a nose dive but also points to that China is slowly shifting its economy from a manufacturing and export oriented one to domestic consumer driven.

However China's benchmark stock index, Shanghai composite failed to gain over the improvement and closed at 3694, down -1.65%.