China data points towards economic recovery
By Lucy Hornby
BEIJING (Reuters) - China's official purchasing managers' index (PMI) rose to a 13-month high in April, signaling the economy has found a footing and may be recovering from a first-quarter trough, but smaller factories are still struggling.
The pick-up in the PMI to 53.3 from 53.1 in March indicated a further expansion in the vast factory sector, although it was slightly below market expectations of 53.6. Readings above 50 signal expansion while those below 50 point to contraction.
The manufacturing output sub-index rose to 57.2 from 55.2 in March. However, the National Bureau of Statistics noted many important industries remained weak with index readings below 50, among them chemicals, equipment, autos and oil refining.
The improvement in manufacturing likely reflected restocking after a slow winter, said Ting Lu, an economist at Bank of America-Merrill Lynch.
He said infrastructure investment was recovering as the dust settled from a corruption scandal in the Ministry of Railroads and from bureaucratic reshuffling at the local government level.
Although new export orders edged up to 52.2 from 51.9 in March, the sub-index for all new orders slipped to 54.5 from 55.1, implying that domestic new orders remained weak.
SMALL FIRMS SQUEEZED
The PMI boosted Australian shares, but did little to move other markets where investors are concerned about a sluggish U.S. economy and the bubbling euro area debt crisis. Indeed, many markets, including those in China, are closed on Monday to mark public holidays. Continued...