Manufacturing, Services PMIs show traction

Health of India's manufacturing sector got better in January, with a private barometer growing at its fastest pace in nearly one and a half years, as recovery takes a firmer hold in one of Asia's leading economy. A measure of India’s manufacturing output rose to 57.6 in January, the highest since August 2008, according to the Purchasing Managers’ Index (PMI) compiled by HSBC Holdings Plc and Markit Economics. The index was at 55.6 in December. A reading over 50 indicates expansion and a fall below 50 means contraction. The big jump in the PMI was boosted by a sharp rise in new export orders that underpin a recovery in the industrial sector, the HSBC-Markit survey showed. "Any lingering concern that India's manufacturing recovery was tailing off should be well and truly put to rest by this strong release," said Robert Prior-Wandesforde, senior Asian economist at HSBC. "A second consecutive rise in the PMI has taken the series to a new cycle high, consistent with ongoing double-digit rises in industrial production."

Separately, a key business index showed that India's service sector output expanded at its fastest rate in 16 months in January as the country shook off the impact of the global slowdown. The strong performance of the sector was attributed to a sharp rise in new orders. The HSBC India Services Purchasing Managers' Index (PMI) posted a reading of 59.0 last month - its highest since September 2008, just before the global slump hit Asia's third-largest economy.