China factory activity grows more than expected in June

(Sharecast News) - China's manufacturing sector grew more than expected in June, according to data released on Tuesday by the National Bureau of Statistics. The official manufacturing purchasing managers' index rose to 50.3 from 50.0 in May, coming in a touch ahead of market expectations for a reading of 50.1.

A reading above 50.0 indicates expansion, while a reading below signals contraction.

The non-manufacturing PMI, which covers construction and services activity, ticked up to 50.2 in June from 50.1 in May. Economists had been expecting a dip back into contraction territory at 49.9.

Lynn Song, chief economist, Greater China at ING, said: "China's purchasing managers' index data came in slightly stronger than downbeat expectations, but it doesn't suggest a major turnaround in June and a second-quarter slowdown is still likely.

"Sluggish domestic demand could potentially prompt further policy support, with markets looking ahead to July's Politburo meeting."