* 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
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.
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.
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.
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
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)