China released its manufacturing data for the month of April which gained consistently for the fifth straight month in April. The Purchasing Managers’ Index (PMI) surged to 53.3 for the month of April as compared to 53.1 in March. The reading of PMI in February stood at 51. The recent manufacturing data depicts that the China’s economy and conditions at factories are stabilizing.

As per a rule of thumb PMI’s reading above 50 means improvement in business conditions while reading below 50 indicates decrease in business conditions. Probably that was the reason that economists and analysts were still optimistic despite the fact that overall average expectations for PMI were around 53.5.

The increase in PMI was mainly contributed by production index which gained 2 points from the previous month’s reading of 57.2. Further, the index for new orders also advanced but rose with much slower pace as compared to March.

Many analysts were of the opinion that China’s economy is sure improving but still markets and traders should be cautious of overstated optimistic forecasts and outlooks.