Global Economy: China factories see only modest pick-up, Europe stabilises, HSBC, Markit PMIs show

"This said, the story in the euro zone remains one of national divergence between the peripheries and the core, but as the divergence in recent survey indicators between France and Germany shows, now also spreads across core countries."

Markit said the gap between the German and French PMIs was the widest ever, leaving Germany, Europe's largest economy, as the region's shining light.

Germany's PMI staged its biggest one-month jump since the middle of 2009, to 49.8, showing stabilising activity, while output expanded in January.

But in France, Europe's second-largest economy, the downturn deepened. Its PMI sank to a four-month low of 42.9.

PMIs for laggards Italy and Spain beat expectations as new export orders rose.

And British manufacturing expanded modestly in January as output grew at the fastest pace since September 2011, offering a small boost to an economy flirting with recession.

China's official PMI released by the government's statistics bureau eased to 50.4 from 50.6 in December, and below the Reuters consensus for a rise to 50.9. A similar PMI released by HSBC rose to a two-year high of 52.3.

The twin Chinese PMIs showed export orders either grew marginally or shrank as shoppers in the United States and Europe, the two biggest buyers of Chinese goods, cut back spending.

Domestic demand, on the other hand, was the main force behind China's gentle economic rebound, driving growth in new orders in January to multi-month highs.

Factories in Indonesia, the star emerging economy of the past year,

... contd.