Market Overview

China's Manufacturing Sector Just Hit A 51-Month Low

Share:
China's Manufacturing Sector Just Hit A 51-Month Low

The official China PMI eased from 49.4 in January to 49.0 in February – its lowest level in 51 months. The PMI number for February fell short of consensus expectations of 49.4.

According to Nomura analyst Yang Zhao, the PMI is likely headed lower from here, despite the possibility of more government policy easing in China.

“We expect the official PMI to fall further during the year, although some stabilization or even a rebound is likely in March due to seasonal patterns,” Zhao explained in a new note.

Related Link: Wells Fargo Sees 23.5% Recession Probability In Next 6 Months

In addition to the PMI number, China reported an official non-manufacturing PMI of 52.7 in February, down from 53.5 in January.

Not all of China’s February data were negative. Seasonally-adjusted property prices rose 0.6 percent month-over-month and 5.3 percent year over year. Both of these numbers were improvements over January’s numbers.

China’s central bank also announced another reserve requirement ratio cut Monday to free up liquidity in the economy.

“Today’s PMIs showed activity growth was weak at the beginning of this year, which likely contributed to the RRR cut announced yesterday,” Goldman Sachs analyst Maggie Wei explained in a new note. Goldman is now looking to China’s February IP data to be released on March 12 for a clearer picture of the current growth situation in China.

The iShares FTSE/Xinhua China 25 Index (ETF) (NYSE: FXI) is down 12.5 percent year to date.

Disclosure: The author holds no position in the stocks mentioned.

Image Credit: Public Domain

Posted-In: Central bankingAnalyst Color News Emerging Markets Econ #s Markets Analyst Ratings Trading Ideas Best of Benzinga

 

Related Articles (FXI)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
WUBABOCOM InternationalDowngrades
DLTROTR GlobalUpgrades
ARCCCompass PointDowngrades
GTYHCitiInitiates Coverage On7.0
NKEGuggenheimMaintains100.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

Stocks Hitting 52-Week Lows

Credit Suisse Sounds Concerned About SunEdison's Investigation, Filing Delay