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China services PMI points to weakness

July 3, 2013

China’s equity markets came under pressure from weaker-than-expected purchasing manager surveys in the services sector that signaled a continued slow-down in the world’s second-largest economy. The Hang Seng and the Shanghai Composite Index slumped more than 2% during today’s trading session. Investors sold shares of real estate, consumer goods companies, and financials.

China’s services sector slowed in June, the PMI official non-manufacturing PMI from the National Bureau of Statistics and the China Federation of Logistics and Purchasing showed. The index declined to 53.9, the second-lowest reading since March 2011, from 54.3 in May. At the same time, HSBC’s China services PMI remained nearly unchanged at 51.3 in June, compared to 51.2 in May, but the Composite PMI (services & industry) fell to 49.8 in the last month (from 50.9 in May) signaling a weakening of the world’s second-largest economy.