While the result remains below the 50 level that divides expansion from contraction, the mild gain halts a string of declines for the data set.
And yet the market reaction is broadly negative, likely because of some of the report’s not-so-encouraging details. While the subindexes for both output and overall new orders slowed the rate of their fall, new export orders swung to a decrease, and the drops for the employment and work-backlog subindexes fell at a faster pace than in the March report.
“Domestic demand showed mild improvement, and deflationary pressures eased, but downside risks to growth are still evident as both new export orders and employment contracted,” wrote HSBC chief China economist Hongbin Qu, summarizing the results.
On the markets, Hong Kong’s Hang Seng Index is trading lower after sitting on the flatline just before the data, while the Shanghai Composite’s 0.1% drop has expanded to a 0.3% deficit.
The China-data-sensitive Australian dollar fell to 93.03 U.S. cents from 93.23 U.S. cents moments ahead of data release.
The HSBC flash PMI normally includes about 85% to 90% of the total responses used in the final edition of the report, due for release early next month.