Chinese service sector activity accelerated slightly in January



LONDON (ShareCast) - The official Chinese non-manufacturing purchasing managers index (PMI) rose marginally to 56.2 in January from 56.1 in the month before, according to the latest data from the Beijing-based National Bureau of Statistics and China Federation of Logistics & Purchasing published over the weekend.

A reading above 50 indicates expansion.

The new orders sub-index, however, declined to 53.7 from 54.3, which for Nomura casts doubt on the strength of the recovery in the service sector. The input prices gauge rose sharply, to 58.2 from 53.8.

In a separate report, the Chinese Index Academy, a private research institute, announced housing prices rose by 1 per cent month-on—month in January in the 100 cities that they track, well above the 0.2% increase seen in November (Xetra: A0Z24E - news) .

Linked to the above, Nomura writes today that, "we maintain our view that the government cannot maintain loose monetary policy in 2013." The broker expects housing prices to be a hot issue under debate at the National People's Congress in March, with the introduction of new measures to contain housing price inflation a possibility.