India PMI improves in July 2019

India's manufacturing activity strengthened in the month of July, on the back of quicker upturn in factory orders. As per the survey report, the Nikkei India Manufacturing Purchasing Managers’ Index (PMI) - a composite single-figure indicator of manufacturing performance - surged to 52.5 in July from 52.1 in June. A reading above 50 indicates an expansion of the manufacturing sector compared to the previous month and vice versa.

Consumer goods producers led the upturn in July for the third month in a row, although there was also a stronger improvement in business conditions at intermediate goods makers. The capital goods sub-sector dipped into contraction, with lower sales causing reductions in output & quantities of purchases, according to the survey report.

Besides, new export orders also continued to rise, but a slowdown in growth was noted. Besides, external sales rose to the least extent since April 2018 as factories took a hit from subdued global trade flows.

On the price front, input costs increased slightly in July as higher prices for steel, chemicals, cotton and freight were partly offset by lower charges for base oil, copper and plastics. The overall rate of inflation was at a three-month low and well below its long-run average. Output charges rose marginally in July, following reductions in each of the two previous months.

Meanwhile, the BSE Sensex and NSE Nifty was trading in negative terrain. At 14.30 hours the Sensex was trading 440 points down and Nifty was down by almost 130 points.