Emerging markets picked up in October: Survey

Output growth across emerging markets picked up in October, which came as the fastest rise seven months, while business expectations also rose from the previous month's near-record lows, according to a survey.

The composite HSBC Emerging Markets index for services and manufacturing was up at 51.7 from 50.7 in September, on a push from the strongest rally in Chinese goods exports for 11 months.

According to HSBC 15 of the 18 emerging markets covered in its survey had enjoyed an expansion in output, with robust increases in activity in China, Brazil and Russia.

Reuters quoted Pablo Goldberg, global head of emerging markets research at HSBC in New York as saying, there were a large number of countries showing improvement.

He added, there was a better outlook for emerging market trading partners - China, the US and the euro zone.

The index confirmed what purchasing managers surveys (PMIs) worldwide had shown, namely that economic growth was slowly rising.

According to a separate PMI survey by JPMorgan earlier this week, global manufacturing activity had increased at its fastest pace in over two years in October, on an increase in new orders that led factories to take on more staff.

According to the  HSBC survey, new business growth across emerging markets rose at the strongest rate in seven months in October, leading to the first employment rise in four months.

Meanwhile, activity in the services sector, which occupies the largest share in the Indian economy, fell moderately in October, according to the widely-tracked HSBC Purchasing Managers' Index (PMI) released on Tuesday.

This came as the fourth monthly contraction in a row.

It was 47.1 points from 44.6 points in September, when it was the lowest since March 2009.The services PMI had been deteriorating since July this year and even as the reading was up this month, this still indicated contraction, as a reading above 50 means expansion.

According to Leif Eskesen, chief economist for India and the Association of Southeast Asian Nations at HSBC, the continued contraction in service sector activity was testament to the dampening effects of the heightened macroeconomic uncertainty, which was making businesses and consumers more cautious about spending.

According to commentators, the hope of a recovery in the second half of the year became dimmer, as the PMI manufacturing released for October had also contracted and stood at 49.6 points, the same as in September.

According to Eskesen, while activity readings might be stabilising, a notable recovery was not on the cards for a while still.