Within the euro zone, Germany — Europe's largest economy — saw
activity accelerate whereas in France, the bloc's second biggest,
"Given the problems the euro zone faces, to get even a modest rate
of positive growth this year is a good sign. But there is an
increasing concern that two of the larger economies — Italy and
France — are struggling to gain any traction," said Peter Dixon at Commerzbank.
"The long slide in China that we have seen in recent months might
have turned a corner."
Beijing has introduced policy steps to arrest the slowdown in the
world's second biggest economy and the pace of decline did moderate
The HSBC/Markit flash Purchasing Managers' Index (PMI) for April
rose to 48.3 from March's final reading of 48.0, but was still below
the 50 line separating expansion from contraction.
"It's generally in line (with expectations), reflecting that growth
momentum is stabilizing," said Zhou Hao, China economist at ANZ in
Hao expected annual economic growth to pick up slightly to 7.5
percent in the second quarter after it slowed to 7.4 percent in the
first from a year earlier, its slowest reading in 18 months.
Manufacturers in the world's biggest economy of the United States
also picked up the pace this month, a sister survey due at 1445 GMT
is expected to show.
European shares edged down on Wednesday after three days of gains
after the Chinese data offset broadly reassuring European numbers.
The euro zone's private sector started the second quarter on its
strongest footing in nearly three years, but burgeoning new orders
were again mainly buoyed by firms cutting prices.
Topping expectations of all 36 economists polled by Reuters, the
bloc's dominant services industry led the charge while manufacturers
also had a stronger month than the median forecast had suggested.
But worryingly for policymakers, who have struggled to bring
inflation up to their 2 percent target ceiling, service firms cut
prices for the 29th month in a row, and did so at a steeper pace
than in March.
Inflation fell to just 0.5 percent in March, its sixth straight
month in what European Central Bank President Mario Draghi has
called a "danger zone" below 1 percent and keeping pressure on the
ECB to intervene.
"Today's figure buys the ECB a bit more time. With the recovery
still on track there doesn't seem to be an urgent need for strong
action, though deflationary pressures still warrant attention,"
Peter Vanden Houte at ING said.
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Markit's flash composite PMI, widely regarded as a good gauge of
growth, suggested economic support may not be necessary.
It jumped to 54.0 in April from March's 53.1, above the 50 mark for
the 10th month and chalking up its highest reading since May 2011. A
Reuters poll had predicted no change and Markit said if maintained
would point to 0.5 percent second quarter growth.
"The PMI indicator corroborates the picture that the euro zone
recovery has legs," Vanden Houte said.
That growth was again led by Germany where its PMI jumped from March
and was only just shy of February's 32-month high.
The rest of the bloc also performed well apart from France, where
although the index held above 50 for the second month running it was
down from the previous reading. The French PMI has been below the
wider euro zone reading for 20 months.
France's independent fiscal watchdog said on Wednesday the
government's 1.0 percent growth forecast for this year was realistic
and the 1.7 percent target for 2015 was attainable but dependent on
However, a Reuters poll earlier this month predicted only 0.8
percent growth this year and 1.2 percent next.
But the picture is different in Britain. The economic recovery there
is gaining momentum, minutes from the Bank of England's April 9
policy meeting showed.
"Today's minutes highlight that the outlook for the global economy
has not changed much over the past few weeks, with some strength in
the advanced economies versus some easing in the emerging
economies," said Annalisa Piazza at Newedge Strategy.
(Editing by Janet Lawrence)
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