China manufacturing index hits 7-month high

HSBC’s preliminary purchasing managers’ index (PMI) for this month hit 50.9, a significant improvement from September’s 50.2 and the highest since 51.6 in March.

The index tracks manufacturing activity in China’s factories and workshops and is a closely watched gauge of the health of the economy. A reading above 50 indicates growth, while anything below signals contraction.

The strong performance in October came on the back of ‘’broad-based modest improvements’’ in the Chinese economy, said Qu Hongbin, an HSBC economist in Hong Kong, in a statement accompanying the data.

‘’This momentum is likely to continue in the coming months, creating favorable conditions for speeding up structural reforms,’’ he said.

The October PMI reading may help alleviate market concerns over the sustainability of China’s recovery.

Growth in July-September hit 7.8 percent year-on-year, snapping two quarters of slowing expansion, according to official data released last week.