China stocks tumble after disappointing PMI data

Mainland China share market ended sharp lower on Monday, 2 February 2015, registering fifth session of consecutive fall, as risk aversion selloff triggered across the board amid further signs of weak manufacturing activity in China. The Shanghai Composite Index closed down 2.56% at 3128.30. The gauge has slumped 7.5% over the past five days.

China's official purchasing managers' index of manufacturing activity shrank last month for the first time in more than two years, data released at the weekend showed. A mainland factory gauge from HSBC Holdings Plc/Markit Economics also missed estimates today. The weaker than expected manufacturing data heightened concerns that the world's second largest economy was still struggling to gain traction after expanding at its slowest pace in 24 years in 2014.

China's official manufacturing purchasing managers index fell to a weaker-than-expected 49.8 in January 2015 from 50.1 in December 2014, its first dip below 50 since September 2012. A final reading of the HSBC China Manufacturing Purchasing Managers Index (PMI) slightly dropped to 49.7 in January 2015 from a preliminary reading of 49.8, while fractionally up from a final reading of 49.6 in December 2014. A reading below 50 indicates contraction from the previous month, while anything above that shows expansion.

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