CHINA'S SERVICES SECTOR CONTRACTS IN JUNE

Activity in China's services sector contracted for the first time in ten months in June, according to a leading index.

The HSBC China services purchasing managers' index printed at 49.8, after a reading of 50.9 in May. 

A reading above 50 indicates expansion in the sector, while below 50 points to contraction.

HSBC chief economist for China Hongbin Qu said the underlying growth momentum is likely to be softening for services sectors, along with the slowdown of manufacturing growth.

"With sluggish growth of new orders, employment growth is under pressure," he said.

"As Beijing's VAT reforms are likely to take time to filter through, we expect slower growth in service sectors in the coming months."

Earlier, China's non-manufacturing purchasing managers' index for June printed at 53.9, a slight fall from May's 54.3.