China’s service purchasing managers’ index
According to Markit Economics, China’s service PMI (purchasing managers’ index) weakened in March, falling to 52.3 from 54.2 in February. It missed the market estimate of 54.5.
China’s March service PMI was driven by the following factors:
- Production output and volumes improved at a softer rate.
- New business orders witnessed a weaker rise in March than in February.
- Employment in the service sector saw the smallest improvement in 19 months.
Performance of ETFs in March
Although China’s manufacturing activity rose strongly in March, service activity improved at a softer rate, mainly due to weaker client demand. Donald Trump disapproved of China’s trade practices, implementing an import tariff. Trump’s tariffs, which could hamper China’s aeronautic, new energy vehicle, and technology production, impacted investor sentiment.
The iShares China Large-Cap ETF (FXI) rose marginally in March, while the Direxion Daily FTSE China Bull 3X ETF (YINN), which tracks China’s (ASHR) performance, fell 2.4%. In the next part of this series, we’ll analyze Indonesia’s manufacturing PMI in March.