A reading below 50 means contraction in the sector.
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.
Recent reform measures announced by the government expected to boost the sector.
Input prices rose at their fastest rate in 14 months but manufacturers absorbed much of the increase
India's manufacturing sector growth improved in November, registering the fastest pace in five months, driven by a strong pick up in new orders and improved purchasing activity, an HSBC survey said on Monday.
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.
Bumper liquidity as a result of global central bank stimulus measures should prevent a sharper downturn.
It was the second straight week of gains for the benchmarks.
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.
The wider NSE Nifty too fell by 20.15 points or 0.19 per cent to end at 10,749.75.
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.
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.
A reading above 50 means the sector is expanding, while a reading below 50 means contraction.
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The subdued labour market is likely to recover.
The HSBC India Manufacturing Purchasing Managers' Index (PMI) - a measure of factory production - improved slightly to 55 in June, from 54.8 in May.
According to HSBC, the RBI will keep the policy rate on hold next week, although it is likely to cut the CRR by 0.25 per cent to address the lingering liquidity tightness.
The NSE Nifty, however, ended a shade higher by 6.65 points or 0.06 per cent at 10,442.20
Tata Motors was the top Sensex gainer, up nearly 5%.
India's manufacturing sector growth slowed marginally in February, although strong domestic orders were likely to support output expansion in the coming months, an HSBC survey has said.
The HSBC Emerging Markets Index, a monthly indicator derived from Purchasing Managers' Index surveys, inched up to 50.6 in May from 50.4 in April, indicating weak output growth across global emerging markets.
India's services sector growth rate saw a slight fall in July but remained in the positive terrain for the ninth month in a row, amid rise in new orders and employment levels holding up, an HSBC survey says.
Amid decelerating economic growth and falling industrial output, India's services sector has shown signs of promise in May recording the fastest pace of growth in the past three months, says an HSBC survey.
Other major laggards were IndusInd Bank, SBI, Bharti Airtel, ONGC, Tata Steel and Reliance Industries -- falling as much as 6.30 per cent.
Losses largely came from the metal index, followed by power, infrastructure, realty, PSU, oil and gas, capital goods, FMCG, healthcare, auto and banking.
Manufacturing of consumer goods, like food and liquor continued to improve in September.
UN economists announced a likely USD 50 billion drop in the worldwide manufacturing exports in February alone as the extent of the damage to the global economy caused by the novel coronavirus (COVID-19) moved further into focus. Citing the China Manufacturing Purchasing Manager's Index (PMI), Pamela Coke-Hamilton, who heads UNCTAD's Division on International Trade and Commodities, said that it had fallen to 37.5 -- a drop of about 20 points -- the lowest reading since 2004. "This also correlates directly to exports and also implies a two per cent drop in overall exports," she said, with a resulting "ripple effect" worldwide "to the tune of a USD 50 billion fall in exports."
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.
Brokerage Edelweiss Securities said if the NDA returns to power with a clear majority in line with exit polls, markets would rejoice the policy continuity.
The biggest losers in the Sensex pack were Vedanta, Tata Steel, M&M, Tata Motors, Maruti, Hero MotoCorp, PowerGrid, Bharti Airtel, SBI and Coal India -- falling up to 4.48 per cent.
In the United States, economic data is likely to take a back seat next week.
The NSE Nifty gained 77.85 points, or 0.71 per cent, to finish at 11,008.30. Intra-day, it shuttled between 10,821.55 and 11,035.65.
The GST rate for the sector has not yet been finalised by the government.
The minutes of the December MPC meet reveal members felt the current spike in the headline inflation rate was due to a temporary supply shock on the food front, expected to moderate by the second quarter of 2020-21.
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The rupee was last at 62.05/06 after gaining to as high 61.9650 against the dollar, its highest since Nov 19. It had closed at 62.44/45 on Friday.
A reality check on the India vs China growth story.
Observing that the economic recovery was not yet fully entrenched, the RBI Governor said recovery is likely to be gradual.
HSBC's purchasing managers' index was released on Tuesday.
The trade impact of the coronavirus epidemic for India is estimated to be about 348 million dollars (approximately Rs 25 billion) and the country figures among the top 15 economies most affected as slowdown of manufacturing in China disrupts world trade, according to a UN report. Estimates published by United Nations Conference on Trade and Development on Wednesday said that the slowdown of manufacturing in China due to the coronavirus (COVID-19) outbreak is disrupting world trade and could result in a 50 billion dollar decrease in exports across global value chains.
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