The preliminary China Caixin purchasing managers index (PMI) surprised markets by dropping to a 15-month low in July, with analysts pinning the hit on the recent stock market crash and weak export demand.

The index, released Friday, fell to 48.2, coming in well below the 49.7 forecast from a Reuters poll and the 50-mark separating growth from contraction.

"The PMI came as a big surprise for the market, which was expecting an increase," Dariusz Kowalczyk, senior economist at Credit Agricole private bank, said. "I believe the reading reflects the negative impact of the stock market crash, the weaker outlook for consumption and the worsening of availability of funding for investment," he said, noting that initial public offerings (IPOs) were suspended in the wake of stock market turmoil.

After the data, the Australian dollar (Exchange: AUD=) dropped as low as $0.7293 - its lowest against the greenback since May 2009, during the Global Financial Crisis - from $0.7345 before the release. China is among Australia's largest trading partners, offering a market for resources exports. The Shanghai Composite (Shanghai Stock Exchange: .SSEC) held on to gains, although they narrowed.

The data mark a sharp contrast to China's quarterly gross domestic product (GDP) data released last week, which beat forecasts by showing 7.0 percent growth, renewing long-standing concerns over data accuracy.

"Recent improvements in economic momentum may have been derailed this month by weaker foreign demand," Julian Evans-Pritchard, a China economist at Capital Economics, said in a note Friday, adding that the export orders component of the data posted the largest decline. "Today's PMI reading suggests that the improvement in momentum seen at the end of the second quarter may not have extended into the start of the third quarter and that downside risks to growth remain."

He doesn't believe the recent stock market turmoil was to blame for the disappointing data, citing a "weak link" between equity prices and consumption on the mainland.

Concerns about slowing economic growth on the mainland have spurred policy makers to action. Late last month the People's Bank of China (PBOC) cut interest rates and the reserve requirement ratio (RRR) for some lenders in a bigger-than-expected easing package. That marked the PBOC's fourth round of major action since November amid concerns that the government's annual GDP target of "around 7 percent" could be at risk. China last cut both interest rates and the RRR at the same time in December 2008, at the peak of the global financial crisis.