According to HSBC Markit Business Activity Index –based on a survey of around 400 firms- India's services sector expanded in November for the first time in two months as new business accelerated despite persistent inflationary pressures. The index was pegged at stood at 53.2 in November, above the 50-mark that separates growth from contraction. It had fallen to 49.1 in October after contracting for the first time in more than two years in September to 49.8. Despite tight monetary conditions, the sub-index for new business accelerated to 52.3 in November from 51.0 in October, driving the turnaround in the service sector.
The partially convertible rupee, which weakened to a record low in November, could prove a boon for Indian IT service stalwarts such as Infosys Ltd and Tata Consultancy Services that get more than half their revenue in U.S. dollars.