Business activity across emerging markets expanded in January at the slowest pace in four months

Business activity across emerging markets expanded in January at the slowest pace in four months. A survey on Monday showed activity was dragged down by sluggish services sectors in the BRIC quartet of big developing countries. HSBC's composite emerging markets index of manufacturing and services purchasing managers' surveys slipped for the second month running to 51.4 but stayed above the 50 threshold which marks the difference between expansion and contraction. HSBC's global head of emerging markets research, Pablo Goldberg, said the data showed a clear divergence in recovery pattern between emerging economies. Among the winners, we have countries in a clear cyclical recovery that are being lifted by the improvement in the developed markets: Mexico, Poland and the Czech Republic, Goldberg said. By contrast, PMIs decelerated in Turkey, Brazil, Russia and Indonesia. These are among the countries where deteriorating external balances have prevented monetary easing or forced tightening. (VIEW LINK)