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:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Market Eye

REUTERS SHOWCASE

Segway in India

Segway in India

Segway’s India business pegs hope on tech-savvy Modi  Full Article 

Cipla Shares

Cipla Shares

Cipla jumps after key generic launch.  Full Article 

Modi in Japan

Modi in Japan

Japan and India agree to boost strategic ties at summit.  Full Article 

Basel III Norms

Basel III Norms

RBI amends Basel III guidelines for banks.  Full Article 

Antitrust Probes

Antitrust Probes

U.S. business lobby says concerned China antitrust probes unfair.  Full Article 

Current Account

Current Account

Balance of payments surplus for third straight quarter.  Full Article 

Book Talk

Book Talk

Reema Abbasi and a glimpse of Pakistan’s Hindu past.  Full Article 

Reuters India Mobile

Reuters India Mobile

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