China's manufacturing sector was in a poor state in January, a private survey confirmed on Monday, amid increasing speculation that policymakers will intervene with fresh measures to spur the economy.
The final HSBC Purchasing Managers' Index (PMI) fell to 49.7, a touch below its 49.8 flash reading, and after dipping to 49.6 in December. A reading below 50 indicates contraction.
China's benchmark Shanghai Composite index widened losses to more than 2 percent on the news, hitting a near two-week low. Meanwhile, Hong Kong shares and the Australian dollar were little changed.
"Chinese manufacturers saw a fractional deterioration in operating conditions at the start of 2015. Although output rose slightly and new orders broadly stabilized, staffing levels were cut for the fifteenth successive month," analysts at HSBC said.
"Meanwhile, relatively subdued client demand led companies to reduce their stock holdings of both post- and pre-production goods in January," they added.
The data came a day after the government's official PMI for Januaryalso dipped into contractionary territory for the first time in two and the half years, coming in at 49.8 and surprising market watchers who were expecting expansion.