China final HSBC PMI at 49.7 in Jan, below flash reading

China's manufacturing sector remained in a poor state in January, a private survey showed on Monday, amid increasing speculation that policymakers will intervene with fresh measures to spur the economy. The final HSBC Purchasing Managers' Index (PMI) fell 49.7, a touch below its 49.8 flash reading, and after dipping to 49.6 in December. A reading below 50 indicates contraction. The data comes a day after the government's official PMI for January also dipped into contractionary territory for the first time in two and the half years, coming in at 49.8 and surprising market watchers who were expecting expansion.China's benchmark Shanghai Composite index widened losses to more than 2 percent on the news, hitting a near two-week low. Meanwhile, Hong Kong shares and the Australian dollar were little changed."Yesterday saw China logging its first manufacturing PMI contraction in over two years. Of particular concern, is that the employment sub-component is at its lowest level since February 2013 - as are new exports," said Evan Lucas of IG Markets. "The People's Bank of China won't be happy with the employment component and may look to continue its targeted measures of the past year to increase employment – this prospect may cause positive speculation in markets for more stimulus," The People's Bank of China (PBOC) in November surprised markets with an interest rate cut, its first since 2012. China's economy has been battling sagging domestic demand, a weak property sector and volatile exports, even as it registered a 7.4 percent growth in 2014, its slowest pace in 24 years. Analysts project growth to fall to 7 percent this year.