China, India offer reprieve from euro debt fears
BEIJING: Factories in China and India cranked production up a gear last month, offering a small boost to the global economy faced by a spreading debt crisis in the euro zone and sluggish recoveries in the United States and Japan.
But manufacturing surveys in both Asian giants also highlighted a worry that has clouded the outlook for investors: rising inflationary pressure and the need for more monetary tightening in fastgrowing developing economies. That could be a bitter pill to swallow with Europe teetering on the brink of more serious debt troubles. The euro stabilized on Wednesday after falling a day earlier on concern that member states may ultimately be forced to default.
Deputy finance ministers from the Group of 20 economies discussed "the financial situation in Europe" on Monday Asia time in a teleconference arranged last week, a senior G20 source in Asia said. The manufacturing sector in Asia provided some solace from the gloomy prognosis in Europe. Two purchasing managers' indexes in China registered their strongest readings in more than half a year and helped lift Asian shares outside Japan by 0.6 percent.
The story was similar in India, where the HSBC Markit PMI climbed to a six-month high. While a rise in output and new orders drove the PMI gains in China, the biggest increases came in input prices.
"Good news from the economy may not be that good for the market as it is concerned about more tightening," said Ting Lu, an economist with Bank of America-Merrill Lynch. -Reuters
MANEJA: India's Gujarat state CM Narendra Modi, CEO of Siemens Energy Sector South Asia A.K. Dixit, VP of Siemens Oil, Gas Division Carsten S. Berendsen and MD of Siemens Armin Bruck arrive at the company. Modi inaugurated the second phase of Siemens company's Steam turbine and compressor manufacturing facility. -Afp