Forex News – China PMI data fuels concerns of slowing growth

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Market sentiment was dampened after a report showing China’s factory sector shrank the most in 32 months in November. Signs that the world’s second largest economy is showing weakness in growth is fuelling fears of a global recession.

A preliminary survey on a purchasing manager’s index (PMI) is added to growing concerns that China may be slipping towards a hard landing as domestic weakness is reflected in the recent data.

The sharp decline in the HSBC flash purchasing managers’ index (PMI) to 48 in November from 51 in October indicates that factory output and new orders are slowing down at the slowest rate since March 2009. A PMI reading of 50 draws the line between expansion from contraction, so anything below 50 is a contraction.

The once hot Chinese property market also appears to be cooling down and was a contributing factor HSBC said that had weighed on the PMI. Average home prices ticked lower in October for the first time this year and property sales fell.

Concerns are growing that the slowdown in manufacturing will spill over to companies involved in shipping, exports and even banking and finance.