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Investing.com-- China’s services sector grew less than expected in June, private purchasing managers index data showed on Thursday, as sluggish overseas and domestic demand weighed heavily on new business activity.
The Caixin services PMI read 50.6 in June, less than expectations of 51.0 and slower than the 51.1 seen in the prior month. A reading above 50 indicates expansion in the sector, with services activity still expanding for a thirtieth consecutive month.
Caixin Insight analysts said the slowdown was linked largely to softer new business growth, as domestic demand remained weak and overseas demand was hit by softening demand in China’s top export destinations, as global economic growth cooled.
U.S. tariffs continued to be a point of contention, even as Washington and Beijing agreed to slash their respective tariffs earlier this year.
The soft services PMI was in contrast to somewhat upbeat manufacturing prints released earlier in the week. While government PMIs still showed a slowdown in manufacturing, Caixin PMI data released on Wednesday showed a swift return to manufacturing growth.
China’s services sector has in the past shown far more resilience than manufacturing, with recent U.S. trade tariffs only affecting material goods. The sector has also seen strong domestic demand, despite an overall cooling in Chinese growth and consumer spending.