Manufacturing expands for first time in six months
Construction and services avoid falling into contraction
Reinforces officials39; belief Sept stimulus can revive economy
Fourth quarter is off to a good start, economists say

BEIJING, Oct 31 Reuters China39;s manufacturing activity expanded for the first time in six months and services picked up in October, indicating that Beijing39;s latest stimulus measures are helping the battered economy turn a corner.

The National Bureau of Statistics purchasing managers39; index PMI on Thursday rose to 50.1 from 49.8 in September, just above the 50mark separating growth from contraction and beating a median forecast of 49.9 in a Reuters poll.

In a further encouraging sign, the nonmanufacturing PMI, which includes construction and services, rose to 50.2 this month, after it dropped to 50.0 in September.

Policymakers are banking that a lastditch stimulus effort announced in late September will pull economic growth back towards this year39;s roughly 5 target and kick lending and investment back into gear, as a sharp property market downturn and frail consumer confidence continue to deter investors.

This is primarily an indication of the early impact of the higher fiscal support, enabled especially by an acceleration in government bond issuance, said Xu Tianchen, senior economist at the Economist Intelligence Unit.

There was a record amount of such issuance in AugustSeptember, which translated into fiscal spending.

The mood…