Global shock as manufacturing contracts in US and China

The closely-watched ISM index of US factories tumbled through the "boom-bust line" of 50 to 49, far below expectations, the Daily Telegraph reports. It is the lowest since the depths of the crisis in mid-2009 and a clear sign that US budget cuts are starting to squeeze the economy. New orders plunged 3.5 to 48.8 on weak foreign demand and reduced federal contracts. The news came hours after HSBC said its index for China also fell below 50, a major inflexion point for the world's industrial workshop. "This is not a good moment for the world economy," said David Bloom, currency chief...