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A traffic policeman walks past a signage decoration for BRICS Summit outside the Sheraton Hotel, the venue of BRICS (Brazil, Russia, India, China and South Africa) Summit in China in this April 13, 2011, file photo.JASON LEE/Reuters

HSBC is going monthly with what is becoming an increasingly closely watched indicator of emerging-market economic health – and its initial report, for January shows that an apparent soft landing in China is lighting a fire under the world's developing economies.

The HSBC Emerging Markets Index, compiled by financial and economic data provider Markit, posted a reading of 53.9 for January, up from 53.0 in December. It's the highest reading since last February.

The index is a compilation of manufacturing and service-sector purchasing managers' indexes (PMIs) across 16 key emerging-market nations. HSBC and Markit have previously been publishing the index on a quarterly basis, but as of this report they have gone monthly – a recognition of the elevated status PMIs have gained in recent years as reliable leading indicators of both economic momentum and stock-market direction. Like most PMIs, the index has a midpoint of 50 – anything above which indicates expansion of business activity.

The 53.9 reading is just a shade below the seven-year average of 54.2. That's pretty impressive for a segment of the global economy that, we have been increasingly told in recent months, had gone into a funk – due both to sluggish export markets in the industrialized world and to the apparent economic stalling in the emerging-market engines of Brazil, Russia, India and China, the so-called BRIC countries.

But Pablo Goldberg, global head of emerging markets research, said in a report released late Tuesday that the EMs have been turning around since August as China's economy found some footing.

"Central to this is the turnaround in the outlook for China, which is slowly pulling the rest of Asia with it," he said. "Countries closer to the ailing euro zone are still struggling, however."

The data show that the services sector in the EMs are generally stronger than manufacturing, which is very export-focused and has been hurt by the weakness in Europe and other developed economies. However, the manufacturing side has picked up, an encouraging indicator for global exports.

And China isn't the only BRIC country starting to pull its weight again. The HSBC/Markit data show that the manufacturing sectors in all four BRICs are in expansion – and India is the only one where the manufacturing component slipped in the month.

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