Global Economy: China factories see only modest pick-up, Europe stabilises, HSBC, Markit PMIs show

* Euro zone PMI suggests worst may be over

* U.S. index expected to show slight slowdown in pace of growth

* China official PMI eases to 50.4 for Jan, vs 50.6 in Dec

* HSBC final China Jan PMI jumps to two-year high at 52.3

By Jonathan Cable and Koh Gui Qing

China's vast factory sector managed only a shallow rebound at the start of 2013 and manufacturing in the euro zone remained weak, although there the worst may be over, a clutch of surveys suggested on Friday.

Markit's purchasing managers' indexes, which cover thousands of factories, pointed to a still slow global economy and data due later on Friday from the United States was expected to show a slight easing of growth in the world's biggest economy.

"The general sense, if you look at what it is in the pipeline, is that we will be getting a little bit more activity in the months to come," said Peter Dixon, economist at Commerzbank.

"The Chinese economy does appear to be gaining a bit of traction but not a huge amount (and) the euro zone numbers tell us the economy remains stuck in low gear."

The uneven nature of the recovery on factory floors was repeated in PMI releases across Asia and Europe. Surveys showed growth slowed in India and stalled in South Korea while Britain's expanded modestly.

The crisis-hit euro zone appears to be stabilising, however. Factories in the common currency area had their best month in nearly a year as an improving outlook in Germany offered support amid signs the worst may be over for the troubled bloc.

Two separate versions of China's PMI pointed to rising factory output in the world's second-biggest economy, but the pace of the revival in activity in January was uneven.

"Chinese manufacturers received support from robust domestic demand, but were struck by the lacklustre demand from its two main export destinations, Europe and the U.S.," said Nikolaus Keis, an economist at UniCredit.

... contd.

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