The HSBC Markit Purchasing Managers Index (PMI) is at 51.0 for April, the lowest since November 2011. Remember that anything about 50 is “expansion” and below 50 is contraction – so we’re still growing at an increasing rate, just not quite as fast as earlier.
While this sounds bad, the Nifty touched 6,000 again, +1.2%. This could be due to the feeling that the slowing down of the world economy might prod central banks to cut interest rates further – the Feb and ECB meet today, and the RBI meets tomorrow. Indications, from Markit, are similar:
"Manufacturing activity lost momentum again in April,
with output growth slowing further on the back of a
deceleration in domestic orders and continued power
outages. Export orders, on the other hand, picked up.
Encouragingly, input and output price inflation eased.
With the growth momentum slowing and inflation
receding, the RBI is likely to cut the policy rate this week.”
Interesting times indeed!