After manufacturing, the service sector shows revival:
After the encouraging numbers of manufacturing, India’s service sector activity also improved in October. Manufacturing PMI for October, released earlier had seen the highest monthly expansion in 17 years.
Now, after seven months of decline, India's service sector Purchasing Manager Index (PMI) has come in at 54.1 in October, up from 49.8 in September. PMI is an activity measurement index. A print above 50 means expansion and a score below that denotes contraction.
The October data of service PMI reflects rising work intake and new orders in India's service sector. This expansion in PMI reflects that the service sector has also started to contribute and economic revival has further picked up the pace.
India's export declines by 5.4% in October:
After recording positive growth in September, India's exports declined 5.4% to $24.82 billion in October.
Petroleum products(53.30%), cashew (21.57%), gems and jewelry (21.27%), leather (16.69%) and electronic goods (9.40%) were the major commodities which recorded negative growth during October. India's imports also fell 11.56% to $33.6 billion during the month.
We believe that hike in ocean freight rates (due to equipment shortages and the reduction of vessel capacity in the Indian subcontinent) could have resulted in exports taking a hit. Looking forward, the US elections could also have an impact on exports. The US is the largest exporting partner for India and accounts for ~16% of India's total exports.
PM Modi wants global fund houses to become a part of the India story:
Prime Minister Narendra Modi is scheduled to hold a meeting with the representatives of the top twenty global fund houses.
Top fund houses from the US, Europe, Japan and Australia are expected to participate in this meeting. Here, the prime minister would attempt to get international investments for some of the marquee projects in the country.
We feel the PM is likely to pitch global investors to invest in the infrastructure pipeline project. This project was announced last year with a commitment of investing up to Rs 102 lakh crore by 2025. It is also important for the government to push investment in infrastructure to revive demand for commodities like cement, metals etc.
