Services activity grows for first time in nearly a year

BANGALORE Wed Jun 4, 2014 2:31pm IST

Receptionists attend to guests at their counter inside the Crown Plaza hotel, run by the InterContinental Hotels Group (IHG), in New Delhi January 31, 2014. REUTERS/Anindito Mukherjee/Files

Receptionists attend to guests at their counter inside the Crown Plaza hotel, run by the InterContinental Hotels Group (IHG), in New Delhi January 31, 2014.

Credit: Reuters/Anindito Mukherjee/Files

Related Topics

BANGALORE (Reuters) - Activity in India's huge services industry expanded for the first time in nearly a year in May, driven by a surge in new business, a survey showed on Wednesday.

The HSBC Services Purchasing Managers' Index, compiled by Markit, rose to 50.2 in May from 48.5 in April, the first rise above the 50 mark that divides growth from contraction since June last year.

A landslide win for Narendra Modi and his Bhartiya Janata Party - which created India's first majority government in three decades - has fuelled expectations for key economic reforms after years of policy paralysis.

That optimism showed in the new business sub-index, which rose to 50.5 in May, also the highest since last June.

The PMI data also showed input costs and prices charged by services companies rose at a slower pace last month.

Inflation has eased this year. Reserve Bank of India Governor Raghuram Rajan opted to keep the central bank's key repo rate unchanged at 8 percent on Tuesday, as expected, after a series of rate rises.

Factory activity expanded at a slightly faster pace in May, while input prices rose at their slowest rate in over a year, a similar business survey showed on Monday.

(Reporting by Rahul Karunakar; Editing by Kim Coghill)

FILED UNDER:
  • Most Popular
  • Most Shared

Market Eye

REUTERS SHOWCASE

Intel's Valuation

Intel's Valuation

Intel could rise 30 percent over next two years - Barron's.  Full Article 

Plunging Oil Prices

Plunging Oil Prices

Oil price seen falling to $60 if OPEC does not cut output  Full Article 

China Economy

China Economy

Exclusive - China ready to cut rates again on fears of deflation - sources  Full Article 

Climate Change

Climate Change

Some climate change impacts unavoidable - World Bank  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage