China\\\'s higher factory activity raises hopes of stronger growth

China continues to show signs of an economic revival as its factory activity expanded at the fastest pace in five months in May, raising some hopes across the region that Beijing's targeted measures to bolster growth are having an impact. China’s official Purchasing Managers’ Index, which is geared towards bigger, state-owned firms, rose to 50.8 in May, from April’s 50.4, the National Bureau of Statistics said on Sunday, beating market expectations of 50.6. Encouraging China factory data and another closing record on Wall Street lifted Asian equities and commodities on Monday. A preliminary HSBC/Markit PMI issued late last month also showed the factory sector turning in its best performance in five months, although that reading remained below the 50-point level that suggests contraction in manufacturing activities. All eyes will be on the release of the final HSBC PMI at 0145 GMT on Tuesday. This index favors smaller and private companies compared with the bigger and state-owned ones captured by the official PMI. ‘The upside surprise was led by new orders index, which rose to a six-month high, reflecting the government's continued effort since mid-March to boost investment and construction activities,’ economists Jian Chang and Serena Zhou at Barclays said in a note. A sub-index for new orders, a measure of foreign and domestic demand edged up to 52.3 in May from 51.2 in April, marking the highest level since last November. China’s manufacturing data bolstered market expectations that the world’s second-largest economy is regaining strength as the government’s pro-growth measures kick in, according to Reuters.