India manufacturing slows in March: HSBC (by Nick Godt)

MUMBAI (MarketWatch) -- Indian manufacturing activity slowed in March, mainly due to power outages and shortages of raw materials, according to HSBC's monthly manufacturing survey. HSBC's manufacturing purchasing index slowed to 54.7 in March from 56.6 in February. Readings above 50 signal expansion. "The moderation in output growth was largely domestically driven and was, at least to some extent, a reflection of tight capacity, with power outages and lack of raw material constraining the ability to produce," said Leif Eskesen, economist for India at HSBC. However, he noted that inflation pressures remained evident as HSBC's index of input prices rose to 61.2 last month from 60.6 in February. The index for output price inflation eased to 54.1 from 56.6, but both indicators remain above historical averages, Eskesen said. The numbers suggest the Reserve Bank of India, which is widely expected to start cutting interest rates this month, "is likely to approach the easing cycle cautiously," he said. On the Bombay Stock Exchange, the Sensex (in:1) was up 0.4% at 17,472.