January services PMI declines

Growth in India's dominant services sector weakened for a second month in January but firms accelerated hiring despite waning demand.

The Nikkei / IHS Markit Services Purchasing Managers' Index declined to a three-month low of 52.2 in January from 53.2 in December, but remained above the 50 mark separating growth from contraction for an eighth month.

Weaker growth in domestic demand, dampened by sharper price rises, offset a rebound in foreign sales and dragged a sub-index tracking new business orders to its lowest since September.

That, alongside uncertainty over the outcome of a national election due in May, pulled down optimism about future activity to a three-month low.

Yet firms increased staff levels at the fastest rate in three months, partly on expectations of increased business after the elections and possibly reflecting resilience in manufacturing activity.

A composite index, taking into account both manufacturing and services activity, remained unchanged at December's 53.6, helped by an unexpected acceleration in factory activity.

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