China manufacturing activity slightly brighter

The preliminary purchasing mangers' index (PMI) released by the British banking giant hit 49.1 this month, up from 47.9 in September.

A reading above 50 indicates growth in the key sector, while a figure below 50 signals contraction.

While the figure marks the 12th straight month of contraction, it is also the second consecutive month of improvement. The index tracks manufacturing activity and is a closely watched barometer of the health of the economy.

The official PMI figure came in at 49.8 for September, a second straight contraction.

October's official figures are expected on November 1, the same day that HSBC releases its final results.

Qu Hongbin, HSBC's chief economist for China, said in the statement that October's better reading was, in part, thanks to a slight improvement in new orders, which picked up to a six-month high.

He added that the PMI result was "helped by the filtering through of the earlier easing measures" introduced by policymakers this year to boost growth.

Those measures include two interest rate cuts in quick succession as well as the easing of restrictions on how much money banks must keep on hand in an effort to boost lending.

China last week said the economy grew 7.4% in the three months to September, slowing for the seventh straight three-month period and its worst performance since the first quarter of 2009.

However, improvements in September for exports, industrial production and retail sales spurred optimism that the worst may be over for the Asian giant, although Qu warned that problems in overseas economies and China's job market continued to weigh on its performance.

"This calls for a continuation of policy-easing in the coming months to secure a firmer growth recovery," he said in the statement.

Source: AFP via I-Net Bridge