The Nikkei Markit India Manufacturing Purchasing Managers' Index (PMI) -- an indicator of manufacturing activity -- declined from 52.5 in April to a three-month low of 51.6 in May.
Finance Minister Nirmala Sitharaman had in May announced that there will be a maximum of four public sector companies in strategic sectors, and state-owned firms in other segments will eventually be privatised.
Experts said the slowdown could be attributed to adjustments leading to destocking and the offering of discounts by companies as the government ushered in the new indirect taxation system on July 1.
The recovery in manufacturing is still likely to prove "protracted" given the lingering structural constraints.
BSE Bankex and Telecom indices led the fall.
"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.
Marking its quickest rise in over seven years, India's services sector activity expanded for the fifth successive month in February, tracking spike in business orders, renewed export demand and strengthening business confidence, a monthly survey showed on Wednesday. The IHS Markit India Services Business Activity Index rose from 55.5 in January to 57.5 in February. This is the fastest expansion in services output since January 2013.
The new orders sub-index, which includes domestic demand as well as orders from abroad, rose to 53.2 in May
The services sector had slipped into contraction in July as confusion caused by the GST rollout triggered a dip in new business orders.
The Nikkei Markit India Manufacturing Purchasing Managers' Index (PMI) -- a gauge of manufacturing performance -- fell to 52.3, down from October's 22-month high of 54.4.
The department for promotion of industry and internal trade has asked the telecom department and State-owned BSNL to put on hold the tender for setting up 4G network, valued at Rs 9,000 crore, after allegations emerged that the tender favoured foreign companies. The tender was floated by BSNL in March under the new management for setting up the 4G network.
During March, the rate of inflation slowed to the weakest in four months and was below the long-run survey average
Finance Minister Nirmala Sitharaman on Thursday said the Indian economy is witnessing a strong recovery after a long and strict lockdown. Addressing a press conference to announce more stimulus measures to boost growth, she said macro-economic indicators are pointing towards recovery. She noted that COVID-19 active cases have declined from over 10 lakh to 4.89 lakh with case fatality rate (CFR) at 1.47 per cent.
A reading above 50 indicates expansion while a one below this level means contraction.
Investment trend by foreign investors will also be closely watched for stock movement
Large investors track high-frequency data that is immediately available today. That data has been bullish, points out Debashis Basu.
FY22 will be the year to rebuild with the IMF projecting output growth at 11.5 per cent, economic survey at 11.0 per cent and the RBI's Monetary Policy Committee at 10.5 per cent.
Wall Street brokerage Goldman Sachs has lowered its estimate for India's economic growth to 11.1 per cent in fiscal year to March 31, 2022, as a number of cities and states announced lockdowns of varying intensities to check spread of coronavirus infections. India is suffering the world's worst outbreak of COVID-19 cases, with deaths crossing 2.22 lakh and new cases above 3.5 lakh daily. This has led to demand for imposition of nationwide strict lockdowns to stem the spread of the virus - a move that the Modi government has so far avoided after the economic devastation last year from a similar strategy.
ICICI Bank was the top laggard in the Sensex pack, sinking over 10 per cent, followed by Bajaj Finance, HDFC, IndusInd Bank, Axis Bank and Maruti. Bharti Airtel and Sun Pharma were the gainers in the BSE index. NSE Nifty suffered a heavy loss of 566.40 points, or 5.74 per cent, to settle at 9,293.50.
Economic recovery in US, euro zone help; new orders sub-index at 52.4
The improvement in business conditions promoted job creation, while confidence towards the year-ahead outlook for activity was at a four-month high during March.
'Dr Khobragade is now a Counsellor without any specific work responsibility at the PMI. There is not going to be any work for her at the mission at least for now. This is an interim measure to help her so she can get diplomatic immunity and get over this situation.'
The 30-share Sensex was up 137 points at 19,517 and the 50-share Nifty was up 45 points at 5,780.
The 30-share Sensex ended up 106 points at 20,898 and the 50-share Nifty ended up 42 points at 6,217.
Service providers' confidence with regard to the 12-month outlook for business activity remained positive.
The Nikkei India Services Purchasing Managers' Index, which tracks services sector companies on a monthly basis, stood at 52 in September, down from August's 43-month high of 54.7, pointing to a slower and moderate rate of expansion.
Financials emerged as the top gainers while auto shares rallied on robust September sales
The 30-share Sensex ended down 64 points at 20,787 and the 50-share Nifty ended down 20 points at 6,192.
The 30-share Sensex ended down 64 points at 20,787 and the 50-share Nifty ended down 20 points at 6,192.
Both indices are down nearly 9 per cent from their all-time highs in mid-January. A sharp reversal seems difficult this time as the peak impact of the virus is yet to play out.
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.
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Manufacturing production growth eased in May, which combined with the slowdown in services resulted in a weaker increase in private sector output, the survey said.
Slowdown persists in China. India's GDP estimates for 2015-16 are liable to be pared; projections for 2016-17 are lacklustre.
Meanwhile, outlook for global emerging markets remained relatively weak in September.
Finance Minister Nirmala Sitharaman on Thursday announced a new job creation scheme by giving subsidy to those establishments that make new hires. The subsidy would be to cover for retirement fund contributions by employees as well as employers for two years, she said. Employees contribution (12 per cent of wages) and employer's contribution (12 per cent of wages) totalling 24 per cent of wages would be given to establishments for two years, she said. Under the Aatmanirbhar Bharat Rozgar Yojana, every Employees' Provident Fund Organisation (EPFO)-registered establishment taking new employees would get this subsidy.
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.
'Retail investors have been selling since the Budget and Foreign Portfolio Investors started selling.' 'Thus far, domestic institutions have picked up the slack, buying enough to keep the major indices from falling off a cliff.' 'However, there has been carnage in smaller stocks and the financial sector has been hit much harder than the major market indices,' points out Devangshu Datta.
Bumper liquidity as a result of global central bank stimulus measures should prevent a sharper downturn.
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