China's factory activity contracts in July; PMI reaches 49

China's factory activity contracted unexpectedly in July after bouncing back from COVID-19 lockdowns in the prior month, as fresh virus flare-ups and a darkening global outlook weighed on manufacturers, an official survey showed on Sunday.

The official manufacturing purchasing managers' Index (PMI) stood at 49 in July, down from 50.2 in June, data from the National Bureau of Statistics showed.

The 50-point mark separates contraction from growth on a monthly basis.

Analysts polled by Reuters had expected the reading to improve slightly to 50.4.