India's services sector activity expanded in May and the pace was the fastest in three months, driven by uptick in new orders, an HSBC survey said on Wednesday.
"Any lingering concern that India's manufacturing recovery was tailing off should be put off. A second consecutive rise in PMI has taken the series to a new cycle high consistent on double digit rise in industrial production," said Robert Prior Wandesforde, senior asian economist, HSBC.
The HSBC/Markit Purchasing Managers Index for the services industry fell to 46.7 in December from 47.2 in November, registering the sixth consecutive monthly drop in output levels, the longest period of continuous reduction since the 2008/2009 global financial crisis.
The HSBC/Markit purchasing managers index for the services industry inched up to 47.1 in October from 44.6 in September, the fourth successive monthly contraction of service sector output across India.
The HSBC Markit Services Purchasing Managers' Index fell to 51.7 in June from May's three-month high of 53.6, in a sign that Asia's third-largest economy is still struggling to climb out of a quagmire of low growth and high inflation.
The HSBC/Markit Purchasing Managers Index for the services industry inched up to 47.2 in November from 47.1 in October, the fifth sub-50.0 reading and indicated an output contraction across the Indian service economy.
In the offshore non-deliverable forwards, the one-month contract was at 62.26/36, while the three-month was at 62.83/93.
The index has posted below the 50 mark, which marks contraction, for the third consecutive month.
The HSBC/Markit purchasing managers index for the manufacturing industry stood at 50.1 in July, slightly more than 50.3 in June, indicating a broad stagnation of manufacturing operating conditions in India.
India's manufacturing sector activity remained broadly flat in June as new orders declined for the first time in over four years and power cuts and fragile economic conditions weighed on the sector's performance, an HSBC survey said.
India's private sector activity contracted further in August, reflecting faster contractions of both manufacturing and services output, amid decline in new orders and tough economic conditions.
According to bankers and economists, there is room for further rate cut by the RBI as retail and wholesale inflation rates have remained benign.
The market breadth in BSE remains positive with 1,554 shares advancing and 1,196 shares declining.
The 30-share Sensex ended down 538 points at 26,781 and 50-share Nifty ended down 152 points at 8,067.
Markets shrugged off RBI's neutral stance on key policy rates.
Sensex closed 63.82 points higher at 26,851.05 in Muhurat trading; Nifty rises 18.65 points to end at 8,014.55.
Earning numbers of blue-chips, including ITC and SBI, due tomorrow.
Markets recorded their biggest single-day fall since August 1 amid growth concerns in the euro zone.
The Sensex ended below 28,000 for the second straight day at 27,869.
The 30-share Sensex ended higher by 46 points at 26,360 and the 50-share Nifty gained 16 points at 7,891.
The 30-share Sensex ended down 30.30 points at 28,161.72 and the 50-share Nifty dipped 7.95 points at 8,543.
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