* Euro zone services PMI dips, U.S. service sector grows
* Japan, Australian cbank policy moves surprise markets
* Indian, Chinese PMIs hit lowest in several months
* British PMI rises, but new orders show weakness ahead
(Refiles to fix links to earlier stories)
By Steven C. Johnson and Andy Bruce
NEW YORK/LONDON, Oct 5 The pace of growth accelerated in the dominant U.S. services sector last month but slowed among Chinese and European firms, with the sectors in Ireland and Spain tipping back into contraction.
The data from around the world painted a mixed picture overall, but showed the U.S. economy steering clear of another recession. Service sector activity in Asia's emerging powerhouses continued to outstrip that in Europe. And while hiring among U.S. service firms increased slightly, it remained modest.
The data accompanied moves from several central banks that heightened unease about the health of the world economy. Japan returned to a zero interest rate policy while Australia surprised markets by keeping interest rates steady.
The U.S. Institute for Supply Management's (ISM) services index rose to 53.2 in September from 51.5 in August, providing some hope economic activity picked up in the third quarter. The reading was above the 52.0 median forecast of 74 economists surveyed by Reuters. A reading above 50 indicates expansion.
"The numbers are obviously better than expected," said Vassili Serebriakov, a currency strategist at Wells Fargo in New York. "We are in a sweet spot where indicators no longer point to a double-dip recession. Instead, they are consistent with a slow recovery."
The services sector provides more than 80 percent of jobs in the U.S. economy. [ID:nN05186153]
JP Morgan's global services purchasing managers' index fell to 52.3 in September from 53.5 the prior month. [ID:nWLA4606]
There were some bright spots from Europe. Solid services growth in France and Germany, albeit a bit slower than in August, tempered the decline in the broader euro zone purchasing managers index. That offset contraction in service sector activity in struggling Ireland and Spain.
The final Markit Eurozone Services PMI for September fell to a six-month low of 54.1 from 55.9 in August. [ID:nSLA4LE6EQ]
U.S. services sector: link.reuters.com/kuw86p
Comparison of PMIS: r.reuters.com/xyn86p
British companies bucked a slowing trend, although the survey showed poor new orders signaling weaker times ahead. [ID:nSLA4LE6EM]
September data indicated Chinese and Indian private firms grew at their slowest rate in many months. However, both sectors continued to outpace their European peers. The HSBC China services PMI fell to a 19-month low in September of 55.2 from 57.6 August. For China, manufacturing remains paramount and its industry PMI rose strongly last week. [ID:nTOE692006]
The PMI index in rival emerging market India hit a 10-month low of 55.6 from 59.3 the previous month.
"India's service industry is stepping off the throttle. Along with the manufacturing sector, growth is slowing, although the expansion continues," said Frederic Neumann, Co-head of Asian economics research at HSBC.
U.S. stocks rose on the ISM data. Treasuries were little changed as bond traders focused on chances of more policy easing by the U.S. Federal Reserve. European stocks .FTEU3 ended up 1.4 pct.
The state of the world economy will be discussed at the International Monetary Fund's Oct. 8-10 annual meeting. Currency depreciation will be a key issue. [ID:nN30154987]
CENTRAL BANKS STEP IN
While the latest batch of PMI surveys added to evidence the global economic recovery is cooling and not ending, central bankers in Japan unveiled a slew of new measures to boost a domestic economy stuck in the stranglehold of a strong currency.[ID:nTOE69305D]
Yen weakness did not last long, though and the dollar was last trading around 83 yen, near a level seen in mid-September, when the Bank of Japan intervened to weaken the currency.
Financial markets expect the Fed to embark upon another round of asset buying to bolster a sluggish recovery as early as its November meeting, but policy-makers remain divided about the effectiveness of further purchases.
The Reserve Bank of Australia confounded markets by opting to keep its key cash rate at 4.5 percent. But its governor, Glenn Stevens, said higher rates will be required at some point to meet its medium-term inflation target. [ID:nSGE69401B]
IRELAND, SPAIN STRUGGLE
The service sector in Ireland contracted for the first time in six months thanks to a sharp drop in new orders.
Moody's ratings agency said Tuesday it may cut Ireland's credit grade again, citing the weakness of domestic demand just as the government prepares a new round of harsh budget cuts to mend its bailout-burdened accounts. [ID:nLDE6940AV]
Spain, also in rating agencies' crosshairs, saw its service sector recede at a faster pace in September as it too prepares for more austerity and years of high unemployment.
Recent anecdotal evidence from some of Europe's biggest firms still suggests a cautiously upbeat tone, although Europe increasingly relies on demand from emerging economies.
Tesco (TESO.O), the world's third-biggest retailer, said it believed the global economy was recovering strongly and growth in emerging markets would help prevent developed economies falling back into recession. [ID:nLDE6930F0]
Europe's largest travel firm TUI Travel TT.L said winter and summer bookings were doing well. [ID:nLDE6931JX] (Additional reporting by David Milliken in London, Alex Richardson in Singapore, Wayne Cole in Sydney, and Leika Kihara and Rie Ishiguro in Tokyo, editing by Andrew Hay)