India expanded at faster rate than China in June: HSBC

Composite HSBC Emerging Markets index for services and manufacturing fell to 50.6, the lowest since 2009

India expanded at a faster rate than China during June, even as growth in emerging market economies during the month was the lowest since the global financial crisis in 2008/09, an HSBC survey said today.

The HSBC Emerging Markets Index (EMI), a monthly indicator derived from the PMI surveys, sank to 50.6 in June from 51.3 in May, signalling the weakest increase in output since May, 2009.

The latest figure was the lowest in over four years as the Chinese manufacturing output witnessed a decline as did production in other Asian economies, HSBC said.

Among the largest emerging economies, output stagnated in China, registering a marginal fall for the first time since August 2012. Meanwhile, output stagnated in Russia, while India and Brazil both posted weak rates of growth.

During June, the HSBC composite index for India, which maps both manufacturing and services sectors, stood at 50.9, whereas for China it was 49.8, Brazil 51.1 and Russia 50.1.

An index measure of above 50 indicates expansion.

Commenting on the findings, HSBC Co-Head of Asian Economic Research, Frederic Neumann said, "Asia is feeling the pinch from jittery financial markets. The road ahead looks bumpy with manufacturing slowing further."

Meanwhile, the volume of new business in global emerging markets was little-changed from one month previously, weighed down by a fall in manufacturing new orders and the rate of employment growth in emerging markets was marginal in June.

With regards to business expectation for the next 12 months, HSBC said respondents reflected weaker sentiment in both manufacturing and services sector.

The HSBC Emerging Markets Future Output Index is a new series tracking firms' expectations for activity in 12 months' time declined in June.

However, the longer-term prospects for the emerging world remain "encouraging", HSBC said adding that the latest setbacks should be seen primarily as "growing pains".