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Activity in China's services sector expanded at its fastest pace in three months in October, a private survey showed on Wednesday, easing concerns over persistent weakness in the world's second-largest economy as the manufacturing sector falters.

The Caixin/Markit Purchasing Managers' Index (PMI) rose to 52.0 in October from September's 14-month low of 50.5, hitting the highest level since July 2015. A reading above 50 points signifies growth on a monthly basis, while one below that points to a contraction.

"This shows that previous stimulus policies have begun to take effect, while the economic structure steadily improved," said He Fan, chief economist at Caixin Insight Group. "The economy has started to show signs of stabilizing, reducing the need for a further stimulus."

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A sub-index measuring new business jumped to 52.9 from September's 50.5 while the employment sub-index also improved to a three month high.

Still, underscoring an uncertain economic outlook, business expectations moderated to a record low in October.

China's official services survey showed on Sunday that growth in China's services industry cooled in October, expanding at its slowest pace in nearly seven years.

The private survey focuses on small and mid-sized companies, while the official gauge looks more at larger state firms.

Two manufacturing PMIs released earlier showed business conditions in China continuing to cool gradually, moderating fears shared by some global investors of a hard landing for the world's second-largest economy.

Beijing has rolled out a flurry of support steps since last year to avert a sharper slowdown, including slashing interest rates six times since November 2014 and lowering the amount of cash that banks must hold as reserves four times this year.

But such measures have been slower to take effect than in the past, and some economists still expect Beijing to roll out more support in coming months.

China's economy grew 6.9 percent between July and September from a year earlier, dipping below 7 percent for the first time since the global financial crisis, though some market watchers believe real growth rates are much weaker than government figures suggest.

First Published:Nov 4, 2015 8:05 AM IST