Downbeat surveys of economic activity in China and parts of Europe highlighted the fragility of the global recovery and raised concerns about the withdrawal of monetary stimulus. A contraction in Chinese manufacturing set the gloomy tone, which was reinforced by data showing an unexpected stall in activity across the euro zone. The preliminary China purchasing managers' index from HSBC/Markit for February came in at a seven-month low, falling deeper into contraction territory. The gauge slid to 48.3 from 49.5 in January. In Europe, the factory gauge for the region unexpectedly slipped to 53 from 54 in January, while the services measure rose less than estimated to 51.7 from 51.6, Markit Economics said yesterday. A composite gauge fell to 52.7 from 52.9. But the US data provided a surprise as the Markit Economics preliminary index of US manufacturing increased to 56.7 in February from a final reading of 53.7 last month, the London-based group said. "The macro data is starting to be not as good as before and some red lights are appearing in our model," Johann Nouveau, partner at Seven Capital Management, a hedge fund that uses mathematical models that gauge economic data and market momentum. "We're still long stock markets but we're decreasing our exposure as the probability of a sharp drop is increasing." Linus Yip, a strategist at First Shanghai Securities, said: "You have to expect Beijing to act if the economy slows down more from here because they cannot proceed with their reform agenda without maintaining a certain level of growth." The data from the world's second-largest oil consumer dragged Brent crude below US$110 a barrel. Markit's composite PMI for the euro zone dipped in February, although it held just below January's 31-month high. The service sector in France shrank at its fastest pace in nine months. "The outcome was much weaker than expected and it clearly shows how business sentiment is failing to gain momentum as headwinds to growth are still well alive," Annalisa Piazza, market economist at Newedge Strategy, said of the French data. The dollar was still firm against other currencies after the Federal Reserve's latest policy meeting showed it would keep trimming asset purchases.