China NBS Manufacturing PMI Falls to 49.5 While the Hang Seng Jumps 1.43%

Significantly, the May PMIs aligned with April trends, where the PMIs signaled a deteriorating macroeconomic environment.

IMF Growth Forecasts and May PMI Takeaways

On Wednesday (May 29), the IMF revised its 2024 growth forecast for China, aligning with the Beijing projection of 5%. The IMF attributed the upward revision from the previous 4.6% forecast to a better-than-expected Q1 2024 and policy measures from Beijing.

Nevertheless, the IMF expects growth to slow to 4.5% in 2025. The April and May NBS PMI numbers suggest a downward shift in economic momentum, aligning with the IMF’s outlook for 2025.

However, on Monday (June 3), the China Caixin Manufacturing PMI will likely impact market risk sentiment more. Economists forecast the Caixin Manufacturing PMI to increase from 51.4 to 51.5 in May.

The Hang Seng Reaction to the NBS Manufacturing PMI

Before the PMI numbers, the Hang Seng Index was up 0.98% to 18,410.

However, the Hang Seng Index brushed aside the weaker-than-expected numbers, climbing to 18,537.