Manufacturing activity in the country contracted for the first time in two years, dragged down by the impact of the Chennai floods and falling new orders, putting pressure on authorities trying to step up growth. The Nikkei India Purchasing Managers' Index (PMI) -a composite indicator of manufacturing performance -fell to 49.1 in December from 50.3 in November.The 50-point mark separates contraction from expansion.
The PMI is a survey based on data compiled from monthly replies to questionnaires sent to purchasing executives in over 300 industrial companies. Economists said the PMI survey does not always correlate with industrial production and the latest data should not be seen as an alarm signal of industrial slowdown. They said that they would prefer to wait for a few months before arriving at any conclusion, adding that the PMI survey has a large industry bias and does not always capture what is happening outside that group.
Latest available data shows industrial output growth rose to a 5-year high of 9.8% in October.
In China, The Caixin Markit China Manufacturing Purchasing Managers' Index (PMI) fell to 48.2 in December, down from November's 48.6. It was the lowest reading since September.The weakness in Chinese industrial sector pulled down stock market sentiment across the region.
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