Chinese stocks fall as manufacturing gains momentum
City Index December 3, 2012 3:15 PM
<p>China’s major stock indices have fallen after two PMIs showed the country’s manufacturing sector is growing.</p>
The major Chinese stock benchmarks have slumped as the nation's manufacturing sector appears to be gaining pace, helping to alleviate fears the world's number two economy is experiencing a slowdown.
According to HSBC's purchasing managers' index (PMI) for the country, data soared to a 13-month high in November, while the official state-sanctioned report showed the best reading in seven months.
Today (December 3rd), the bank's PMI posted a reading of 50.5 – up from the previous month's 49.5 – while this weekend the official government PMI shot up to 50.6, compared to October's 50.2.
The PMI system works in such a way that all readings higher than 50 indicate growth, while those lower than this benchmark mean shrinkage. Therefore both PMIs show the manufacturing sector is enjoying expansion, albeit at a sluggish pace.
At close of play in China this morning, the Shanghai SSE Composite index shed 0.5 per cent to an index value of 1959.7 points, while the Hong Kong Hang Seng slid by 1.1 per cent to 21767.8 points.
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