HONG KONG — A closely watched gauge of manufacturing activity in China slumped to its lowest level since March 2009, sending Asian stocks lower on Wednesday and highlighting how the turmoil in Europe and feeble growth in the United States are taking their toll on the giant Chinese economy.
The November purchasing managers’ index, released by HSBC, dropped to 48 this month, from 51 in October — a surprisingly steep decline that is likely to fan worries about the damaging spillover of the West’s problems into Asia, whose emerging economies are now one of the main engines of global growth.
Readings below 50 indicate contraction, and although the HSBC index has dipped below that level on several occasions this year, it had so far held up relatively well.
The sharp drop in November takes the reading to a level not seen since early 2009, when global economic activity was still reeling from the fallout of the global credit crunch after the collapse of Lehman Brothers.
Stock markets fell further in the Asia-Pacific region on Wednesday after the release of the index. The Kospi in South Korea closed 2.4 percent lower, and the Taiex in Taiwan tumbled 2.8 percent. The Shanghai composite index slipped 0.7 percent.
In Hong Kong, the Hang Seng index was down 2 percent in late afternoon trading. Japan was closed for a national holiday.
In Australia, whose commodity sector is heavily dependent on demand from China, the S..P./ASX 200 fell 2 percent. The Australian dollar also dropped after the HSBC index was released, last trading at $0.9775.
The euro edged down to $1.3468 from $1.3505 in New York trading.
European stock futures indicated that markets there would see losses at the open.
Persistently slow growth in the United States and Europe have undermined demand for Asian-made goods and prompted a steady fall in exports from the region. Although intra-Asian demand is helping to offset the decline from the West, exports to the United States and Europe remain a key driver of economic activity in many Asian nations.
Industrial output growth is likely to slow further in China in the coming months as both domestic and external demand cool, Qu Hongbin, chief economist for China at HSBC in Hong Kong, commented in a statement accompanying the index.
On the upside, inflation has slowed more rapidly than expected in China, leaving policy makers in Beijing with more room to take steps to support growth. This, Mr. Qu said, “should gradually filter through to keep China on track for a soft landing.”
Dariusz Kowalczyk of Crédit Agricole CIB said, “While the data should be interpreted cautiously because it has short history, and is not highly correlated with actual industrial output, it does point to significant deterioration of manufacturing sentiment and suggests the possibility of contraction in output.”
Economists are now expecting Beijing to loosen the reins on bank lending once again, and some even expect a cut in interest rates in coming months. Such steps would reverse some of the tightening undertaken over the past year, as Beijing strove to slow down growth and contain the inflation pressures that accompanied it.
The manufacturing index released by HSBC on Wednesday is a preliminary reading derived from a survey of the Chinese manufacturing sector in November, with a final reading published in about a week. The official government manufacturing survey also will be released next week.
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