Chinese index hits six-month high

A Chinese manufacturing index rose to a six-month high in September, signalling that a rebound in the world’s second-largest economy is gaining steam.

The preliminary reading of 51.2 for a Purchasing Managers’ Index released by HSBC Holdings plc and Markit Economics compared with a 50.9 median estimate from 14 economists surveyed by Bloomberg News. The gauge was at 50.1 in August.

A eurozone manufacturing and services gauge rose more than estimated this month, a separate Markit report showed yesterday.

The Shanghai Composite Index and Australian dollar rose on optimism that China’s growth is picking up, boosting prime minister Li Keqiang’s odds of meeting the year’s 7.5% expansion goal.

The government’s broadest measure of credit rose more than forecast in August, indicating that leaders are committed to achieving targets even at the cost of adding financial risks.

“China’s growth rebound has continued to gather some momentum, especially in exports,” said Wang Tao, chief China economist at UBS in Hong Kong. The reading “adds further support” to UBS’s previous increase in its third-quarter growth forecast to 7.7% from 7.5%, Wang said.

The HSBC report on China showed increases in output, new orders, export orders, and prices, while employment fell at a slower rate.

Markit’s composite PMI for the eurozone rose to 52.1 from 51.5 in August, according to a preliminary reading. The median estimate of 25 analysts was for 51.8.

Readings above 50 signal expansion.