HSBC has released the final read of its monthly Chinese manufacturing gauge, with the result weak enough when compared to the preliminary data to tank the stock markets in China and significantly weaken the Australian dollar.
The HSBC Purchasing Managers’ Index (PMI) for April printed at 48.1, weaker than the initial or “flash” reading of 48.3, though still just above the 48.0 result in March. Either way, the result remained below the 50 level that divides expansion from contraction.
“Both the new export orders and employment sub-indices contracted, and were revised down from the earlier flash readings. These indicate that the manufacturing sector, and the broader economy as a whole, continues to lose momentum,” wrote HSBC chief China economist Hongbin Qu in remarks released along with the PMI report.
Among the few bright spots, the output and new-orders components of the report fell at a slower pace than in March.
The market reaction was overwhelmingly negative: Hong Kong’s Hang Seng Index went from a 0.2% loss to a 1% loss; the Shanghai Composite went from a 0.4% loss to a 0.9% loss; the Australian dollar — often touchy about economic news from Australia’s top trading partner — fell from 92.76 U.S. cents to 92.62 U.S. cents.