China's manufacturing activity appears to be contracting this month for the first time since May, according to HSBC's preliminary or "flash" version of its monthly manufacturing Purchasing Managers' Index, released Tuesday morning. The PMI's headline number fell to a seven-month low of 49.5, down from November's final read of 50.0, and dropping below the 50 mark that separates overall growth from contraction. The output subindex extended its fall from the previous month, though at a slower pace, but new orders swung to a decrease, even as new export orders accerlated their gain. "The manufacturing slowdown continues in December and points to a weak ending for 2014," wrote HSBC chief China economist Hongbin Qu in comments accompanying the report. "The rising disinflationary pressures, which fundamentally reflect weak demand, warrant further monetary easing in the coming months," Qu wrote. Chinese stocks eased following the data, with Hong Kong's Hang Seng Index down 0.9% compared to a 0.7% deficit ahead of the PMI release, while the Shanghai Composite Index saw its advance slim to 0.2% from 0.4%. HSBC's final December PMI was due out Jan. 2.
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