CHINA'S business sentiment dipped last month due to weakening production conditions and further contraction in employment, Market News International (MNI), a unit of Deutsche Boerse Group, said today.

Despite a rise in new orders, the MNI China Business Indicator dropped from 55.2 in May to 54.9 in June, but the indicator, a monthly gauge of China's business conditions, stayed above the breakeven point of 50 and is consistent with the moderate economic growth, MNI said in a report.

A sub-index that measures the financial status of businesses declined to 46.4 in June, down from 49.7 in May, the lowest reading since August 2012.

Market analysts said the central bank should ease its monetary policy to spur growth after the recent liquidity squeeze that fueled a surge in lending rates.

However, the sub-index that measures credit availability showed a jump from 42.5 in May to 46.9 in June, the highest since last December.

"So far the extra stimulus promised to boost the economy hasn't helped the growth, and additional credit stimulus has less of an impact each time it is added, as larger and larger amounts are needed to service the already mammoth amount of credit companies are holding," Philip Uglow, chief economist at MNI, said in the report.