After opening the day in green, share markets in India witnessed choppy trades and pared early gains and are currently trading marginally above the dotted line. Sectoral indices are trading on a mixed note with stocks in the realty sector and stocks in the consumer durables sector leading the gains. Stocks in the telecom sector are trading in red.
The BSE Sensex is trading up by 30 points (up 0.1%), and the NSE Nifty is trading up by 11 points (up 0.1%). Meanwhile, the BSE Mid Cap index is trading up by 0.2%, while the BSE Small Cap index is trading up by 0.6%. The rupee is trading at 64.10 to the US$.
In news about the economy. India’s services sector activity continued to be impacted by the implementation of the goods and service tax (GST) regime in July. The country’s predominant sector witnessed contraction for the second consecutive month, according to the Nikkei Services Purchasing Managers’ Index (PMI) survey by Markit.
The Services PMI is the reading of the country’s services sector output and is updated monthly. A reading above 50 indicates expansion, while any score below the mark denotes contraction.
A second consecutive drop in new business resulted in another monthly decline in activity. The services PMI for August finished at 47.5, signaling slow recovery from the 45.9 in July.
Services PMI Feels GST Impact
Though the downturn was less severe than in July, jobs were shed due to fewer workloads, and backlogs were also accumulated. The services sector had slipped into contraction in July as confusion caused by the GST rollout triggered a dip in new business orders.
Although manufacturing production rebounded from July’s downturn, growth was insufficient to offset the contraction in services activity. According to the survey, the downturn was often associated with the implementation of the GST, though there was also a mention of shortages of inputs.
