The "flash" edition of HSBC's China manufacturing Purchasing Managers' Index (PMI) dropped to 48.1 from February's 48.5, remaining below the 50 level separating expansion from contraction. Subindexes for output and new orders both fell at a faster rate than in the previous month, while the employment subindex slowed its decline, and that for new export orders swung to a gain. The flash version of the monthly report -- compiled by HSBC and Markit, in competition with a separate Chinese government PMI -- is usually based on 85%-90% of the total responses used in the final version. HSBC chief China economist Hongbin Qu said the result "suggests that China's growth momentum continued to slow down." Qu said this may lead to fresh stimulus from China's government, which could "include lowering entry barriers for private investment, targeted spending on subways, air-cleaning and public housing, and guiding lending rates lower." Stocks in Hong Kong and Tokyo fell immediately after the data release but regained ground within minutes. Japan's Nikkei Average was up 1.6%, and Hong Kong's Hang Seng Index 0.9% higher, both roughly where they were before the data. However, the Shanghai Composite surrendered its 0.2% gain to trade flat, while Australia's S&P/ASX 200 extended its loss to 0.2% from a 0.1% deficit. The Australian dollar especially sensitive to data from China, fell to 90.56 U.S. cents from 90.83 U.S. cents ahead of the report.