Asian markets slump on signs of fresh China slowdown

Equity markets across Asia have moved into the red after manufacturing figures suggested Chinese industrial activity has hit a surprise six-month low.

The Hang Seng fell 1.4% to 22,752 after HSBC's preliminary Purchasing Managers' index showed an unexpected contraction this month. The gauge fell from 50.5 in December to 49.6 in January, the first contraction for six months and well below economists' expectations of a 50.3 figure. Equities subsequently headed south, with investors fretting that the release indicates a new downward trend for the world's second largest economy. The MSCI Asia Pacific fell 1.1% to 138.46, while the downwards trend also extended to Japan: the Nikkei reversed earlier gains to close down 0.8% at 15,696.