The HSBC Markit Purchasing Managers’ Index (PMI) of Manufacturing for December 2013 dropped marginally from 51.3 in November to 50.7. Anything above 50 is expansion and anything below is contraction.
In two days we’ll have the Services Index for a Composite PMI which should give us a better picture. The statement says:
Today's numbers show that growth remains moderate and struggles to take off due to lingering structural constraints. Even so, inflation pressures remain firm and
are proving sticky. RBI may yet again have to flex its muscles and tighten monetary policy to bring down the elevated level of inflation.”
RBI will act on the 29th of this month. That will be after IIP, CPI and WPI inflation data comes in.
Now this falling rate of growth might be a concern, and given that the release came in the morning (10:30 am) it was definitely not responsible for this:
I think the market went down because markets are volatile. Let’s not read the PMI thingy into this.