Chinese stocks edged higher on Thursday after the central bank sent a subtle easing message amid sliding money market rates.

Gains by large energy companies pushed the benchmark Shanghai Composite Index up 0.3 percent to 2,047 points, following a 0.35 percent increase on Wednesday.

The CSI 300 Index, which includes the largest stocks on both the Shanghai and Shenzhen exchanges, dropped 0.43 percent to 2,154 points.

China's CSI300 index in biggest loss in 7 months

The People's Bank of China said in a statement through the Xinhua News Agency on Wednesday that banking liquidity is "moderate". Nonetheless, it drained 60 billion yuan ($9.8 billion) from the market through open market operations.

It has drained a net 260 billion yuan over the past two weeks through repurchase transactions.

Many interpret the operations as the onset of another round of tightening, but the PBOC statement described the operations as a post-Lunar New Year "routine". It said: "The repo operation is seasonal and not a change of monetary policy."

The bank also said that money market rates are at a "reasonable level", although recent declines sent rates to near-historic lows. "This message indicates to us that the monetary stance has been loosened subtly for now. There is an incentive for the PBOC to keep it loose from now until at least the end of the National People's Congress," Zhang Zhiwei, an analyst with Nomura Securities Co Ltd, wrote in a report on Thursday.

He added that policy easing may accelerate if macroeconomic data scheduled for release on March 13 disappoints, while maintaining his forecast that the PBOC will cut the reserve requirement ratio by 50 basis points in the second quarter.