HSBC PMI falls to 50.7, slow domestic demand offsets pick up from abroad.
From the Sensex basket, Kotak Mahindra Bank, HCL Technologies, ICICI Bank, Infosys, Tata Consultancy Services, Wipro, Tech Mahindra and Larsen & Toubro were the major laggards. Mahindra & Mahindra, Nestle, Tata Motors and IndusInd Bank were among the gainers.
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.
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The subdued labour market is likely to recover.
Equity benchmark indices Sensex and Nifty hit their all-time high levels on Friday helped by impressive GDP data and fresh foreign fund inflows. Also, a rally in global markets added to the positive momentum in the equity markets. The 30-share BSE Sensex jumped 1,139.04 points to 73,639.34 -- its all-time peak -- in the late afternoon trade.
Production at factories, mines and utilities likely rose an annual 2.4 per cent in August, up from July's 0.5 per cent rise, according to the survey of 26 economists.
HSBC's services purchasing managers index, that maps the activity of around 400 firms, despite a 40 basis points dip, has kept above the 50 mark that signifies growth since November.
The survey also showed that both input and output prices rose at a slower pace during the month.
The services sector suffering due to slowing orders, says HSBC.
After contracting for 3 consecutive months, manufacturing activity saw an uptick in November, latest data from the HSBC Purchasing Managers' Index shows.
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The HSBC Emerging Markets Index, a monthly indicator derived from the PMI surveys, continued its upward trajectory in November on the back of faster manufacturing growth.
Investor sentiment got a boost following remarks from the Russian President Putin that allayed fears of an imminent military conflict in Ukraine
India's manufacturing PMI rose to 54.5 in December, 2014, while in the corresponding period a year ago it stood at 50.7, just above the crucial 50 mark which separates growth from contraction.
Private sector output in India expanded for the first time in 8 months in February as slump in the services sector moderated and manufacturing grew at a stronger pace, an HSBC survey said.
Of the BRIC (Brazil, Russia, India and China) economies, China, Russia and Brazil posted sharper increases in activity, but India registered a fourth successive decline in output.
It indicates that the economy has remained frail at the start of the new fiscal year.
The recovery in manufacturing is still likely to prove "protracted" given the lingering structural constraints.
August witnessed the fastest pace of growth in new business orders since February.
The index, however has remained above the 50 mark - below which it indicates contraction - for more than three years now.
India's manufacturing sector witnessed a slowdown in July - the weakest growth rate since November - because of moderation in domestic and export orders amid sagging global economy, an HSBC survey said.
Bumper liquidity as a result of global central bank stimulus measures should prevent a sharper downturn.
The HSBC India Manufacturing Purchasing Managers' Index for the manufacturing industry climbed from 49.6 in October to 51.3 in November on the back of a rebound in new orders and output.
"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.
Bumper liquidity as a result of global central bank stimulus measures should prevent a sharper downturn.
Factory growth picked up in May.
The new orders sub-index, which includes domestic demand as well as orders from abroad, rose to 53.2 in May
Although growth picked up slightly across the world's main emerging markets on an average, rates of expansion remain subdued
Recent reform measures announced by the government expected to boost the sector.
The 30- Share BSE Sensex ended 19924 up 22 points or 0.11 per cent, while the broader 50-share NSE Nifty closed down by 2 points or 0.01 pct at 5907.
The latest PMI showed inflation pressures ebbed further last month with both costs of raw material and prices charged rising at a slower pace than March.
The pace of activity in China's vast manufacturing sector quickened for the first time in 13 months in November, a survey of private factory managers found, adding to evidence that the economy is reviving after seven quarters of slowing growth.
Economic recovery in US, euro zone help; new orders sub-index at 52.4
HSBC's purchasing managers' index was released on Tuesday.
India's manufacturing expanded at a faster pace than China
ONGC, Sesa Sterlite, Tata Steel, RIL and HDFC emerged as the biggest losers
Expenditure cuts necessitated by slowing revenue growth, weak industrial activity worrisome portents
That prompted manufacturers to add jobs for the first time since June.
The survey showed firms passed on a greater cost burden to consumers. Prices charged rose at their fastest pace since October.
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.
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