September factory PMI plunges to near-stall speed

The HSBC Markit India Manufacturing PMI fell more than two points to 50.4 from 52.6,close to the 50 mark dividing growth and contraction. The output index plunged by its biggest amount in one month since November 2008,to 51.1 from 56.

The new orders index,a gauge of future output,fell for the sixth straight month,while export orders contracted for a third month on weak global demand. Growth momentum in Indias manufacturing sector eased further in September. This was driven by weaker orders,with export orders still contracting due to the weaker global economic conditions, said Leif Eskesen,economist at HSBC.

With developed economies perilously close to another recession,emerging markets,which have provided the motor for global growth in recent years,are also facing a crunch. Chinas official purchasing managers index inched up to 51.2 from Augusts 50.9,data on Saturday showed.

Inflation pressures were slightly less intense than in August,the PMI survey showed,but still remain. While the persistent inflation pressures support RBIs tightening bias,the slowdown in manufacturing growth suggests that the end to the tightening cycle is at least now in sight, said Eskesen.

Indias economy grew at 8.5 per cent in the fiscal year that ended in March but growth in the June quarter fell to 7.7 per cent,with some economists predicting sub-7 percent growth in coming quarters.

Indias exports rose 44.25 per cent to 24.3 billion in August from a year earlier.