May 23 (Bloomberg) -- China’s manufacturing is contracting for the first time in seven months, adding to signs that growth is losing steam for a second quarter.
The preliminary reading of 49.6 for a Purchasing Managers’ Index released by HSBC Holdings Plc and Markit Economics compares with a final 50.4 for April. The number was also below the 50.4 median estimate in a Bloomberg News survey of 13 analysts. A reading below 50 indicates contraction.
Weaker manufacturing will test the commitment of China’s new government under Premier Li Keqiang to tolerate slower growth as he tries to shift toward more consumer-driven expansion. Investors soured on China’s outlook in a Bloomberg global poll this month, with the share of respondents who see the economy deteriorating doubling from January.
HSBC will release the final PMI reading on June 3. The National Bureau of Statistics and China Federation of Logistics and Purchasing will release their own PMI survey, with a bigger sample size, on June 1. The official PMI in April was 50.6, down from 50.9 in March.
Aussie and Kiwi sold off as both made session lows at 0.9628 and 0.8026 respectively