Business sentiment among Chinese purchasing managers dropped to an eight-month low in January, according to preliminary survey findings released Monday.

The index by HSBC showed a reading of 49.6, down from 50.5 in December, and the lowest since the 47.7 in July.

A figure above 50 generally means a positive outlook in the manufacturing sector, while below 50 is taken as a negative reading.

“The HSBC Flash China Manufacturing PMI reading for March suggest that Chin’s growth momentum continued to slow down,” the bank said.

“Weakness is broadly based with domestic demand softening further.” “We expect Beijing to launch a series of policy measures to stabilize growth. Likely options include lowering entry barriers for private investment, targeted spending on subways, air—cleaning and public housing, and guiding lending rates lower.” The flash index is based on between 80 and 90 per cent of the results of the survey, and released about a week in advance of the final figures, which can vary.

The drop was mainly due to a weakening in domestic consumption demand, HSBC said.

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