Twin gauges of Chinese factory activity revealed slowing growth in February, underpinning the case for more monetary stimulus a day after the country's central bank moved to improve liquidity conditions.
Output from large factories contracted for the seventh straight month in February, a government survey revealed on Tuesday. The official manufacturing Purchasing Managers' Index (PMI) came in at 49.0, below Reuters forecasts for 49.3 and January's reading of 49.4.
A number below 50 points indicates a decline in factory activity, while one above suggests expansion.
But Chinese government data has long been taken with a pinch of salt so when it comes to assessing the state of factories, investors tend to gravitate towards a private gauge that tracks smaller and medium sized firms, known as the Caixin manufacturing PMI.
Released 45 minutes following the official report, February's Caixin reading edged down to a five-month low of 48.0, versus 48.4 in January.
"Companies that reported lower output generally cited weak market conditions and reduced intakes of new work. Furthermore, total new business declined for the eighth month in a row, albeit at a modest pace that was similar to January," Caixin said in a statement, adding that the decline in production was the quickest seen since September.