China's factory sector contracted by the most in 15 months in July, as shrinking orders depressed output, a worse-than-expected result that should reinforce bets the struggling Chinese economy will get more stimulus.
The flash Caixin/Markit China Manufacturing Purchasing Managers' Index dropped to 48.2. It's the lowest reading since April last year and a fifth straight month below 50, the level which separates contraction from expansion. Output declined to its lowest since March 2014. New orders and new export orders, which expanded in June, fell this month. Analysts say continuing contraction in factory growth is likely to fuel speculation that China will further loosen monetary policy to try to stoke activity.