There is still no Chinese growth momentum

John Robertson

PortfolioDirect

There is still no Chinese growth momentum. The March reading for the official Chinese manufacturing purchasing managers index out yesterday again showed a sector hovering on the edge between contraction and expansion (with a reading of 50.3 compared with 50.2 the previous month). The most optimistic inference being drawn is that the lack of positive momentum in the Chinese economy might make policymakers there more likely to adopt economic stimulus measures to create some upside pressure in the second half of 2014. The updated chart shows deviations in the index from the baseline of 50 (the blue bars) and the S&P/ASX 300 resources index (the red line). Looked at as a sentiment indicator for Australian resources, the index suggests a still longer period in which equity prices have little upward impetus.


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John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business...

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