Services sector in contraction mode

Activity in the services sector shrank in September as new orders sank, a new survey released on Wednesday shows. To add to the worries, overall economic activity is seen to be nearly stagnating, while employment levels fell for the second successive month. The seasonally adjusted Service Sector Business Activity Index fell to 49.8 from 53.8 in August, HSBC Purchasing Managers Index, which is based on a survey of 350 private sector executives showed. Any reading of less than 50 indicates contraction, while economic activity is seen to be growing if the index is over 50. This is the first time since April 2009 that the services sector, that accounts for more than half the Indian economy, has slipped into negative terrain.

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