India Service PMI jumps to 52.2, markets down marginally

Nikkei/IHS Markit released macroeconomic numbers for the Indian services industry on Monday. The country posted Nikkei/IHS Markit Service PMI score of 52.2 for the month of October as against the expansion border of 50.9 in the previous month amid a robust pick-up in the new businesses. Sub-index tracking demand too grew from 50.1 to 52.4 driven by a slower rise in input costs and prices charged. This reduction in the aforesaid cost pressure was utilised in hiring which hit the fastest pace in the last 6 months.

Earlier, at the end of last month, Markit released India's manufacturing PMI which rose to 53.1 from 52.2 in September amid a robust upturn in demand, technological developments and revival in market conditions. Heavy advertising and competitive price structure increased new orders.

All said and done, the outlook looks blur for now amid a fall in business expectations for the future. The degree of optimism was its lowest in 20-month in manufacturing and service. Cautiousness ahead of elections and global uncertainties cue a downside risk and hence firms have chosen to stay shielded.

Indian benchmark indices witnessed open-high on Monday and thereby have tumbled southwards with marginal downturn despite a positive jump in the service activity. Maybe other negative events have offset the positive news as NBFCs and OMCs tumbled the most on the indices.