Article by ForexTime
Risk aversion dominated the markets after data showed activity in China’s factory sector shrank at a faster pace than expected in September, falling to its weakest level in 6-1/2 years due to slowing domestic and export demand.
The preliminary Caixin/Markit China Manufacturing Purchasing Managers’ Index (PMI) slid to 47.0 in September, the worst since March 2009 and well below market expectations of 47.5 and August’s final 47.3. Any number below 50 represents a contraction in activity.
The selloff in riskier assets gained pace, with stocks and commodity currencies tumbling and sovereign bonds rising. Asian stocks headed for their biggest three-day loss since August’s market rout as Chinese shares tumbled in Hong Kong and Shanghai.
China’s factory activity has now shrunk for seven straight months, amplifying global investors’ fears that the world’s second-largest economy is slowing more rapidly than earlier expected, putting a fragile world recovery at risk.
Today’s soft PMI reading raises the chances that third-quarter economic growth could dip below 7 percent for the first time since the global financial crisis.
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Article by ForexTime
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