China economy slump
A factory in China Reuters

A gauge of Chinese services and manufacturing growth rose to a 11-month high in March and the same for India has jumped to a 37-month high as per the purchasing managers' index (PMI) data released on Wednesday.

The index showing private sector economic activity in Hong Kong has, meanwhile, dropped to a 7-month low in the third month.

The Caixin China Composite PMI jumped to 51.3 from February's 49.4, signaling renewed increase in overall Chinese business activity. A reading below 50 shows contraction.

However, experts said concerns remain for the Chinese economy, especially for the manufacturing sector. They also pointed out that the sub-index for employment has fallen below the 50-mark for the first time since August 2013.

"Overall, the services sector developed well, but the economy is riding choppy waves, indicating the lack of a solid foundation for a recovery. The government needs to push forward with "supply-side reform" to encourage the development of emerging industries," said He Fan, Chief Economist at Caixin Insight Group.

The seasonally adjusted India composite PMI jumped to 54.3 in March, its highest in 37 months, and marking a sharp gain from the February reading of 51.2. The services PMI has risen to a 21-month high, helped by expansion in five of the six sub-sectors in the category.

Analysts highlighted the slack in employment sector while pointing out that trends indicate upside risks to inflation.

"Input costs across the private sector rose at the quickest rate in three months and charge inflation likewise accelerated, suggesting that headline inflation may pick-up in coming months," said Pollyanna De Lima, economist at Markit.

"One disappointment is the trend in employment, which showed little change through much of 2015-16, Lima added.

In Hong Kong, output and new business both contracted at the fastest rates since last September, which in turn contributed to a quicker decline in staff numbers, Markit Economics said.

The headline Nikkei Hong Kong PMI declined to 45.5 at the end of the first quarter, down from 46.4 in February, as weak market conditions and fewer new orders led firms to reduce their purchasing activity sharply over the month, while destocking activities persisted.

Analysts say that the sluggish data suggests more policy action is needed to prop up growth in Hong Kong.

"The data suggests that demand both at home and abroad remains sluggish, and more policy action may be required to restore confidence and lift the sector out of its current downturn," said Annabel Fiddes, Economist at Markit.