Indian manufacturing rebounded for the first time in six months during October, having virtually stalled in September, boosted by rising domestic orders for new business, a survey showed on Tuesday.
The HSBC Markit India Manufacturing PMI rose to 52.0 from 50.4 in September, comfortably above the 50 mark which divides growth and contraction.
The new orders index, an indicator of future output, rose after six consecutive declines. The factory output index also jumped to 52.7 after falling for five straight months to 51.1 in September.
"The rate of growth regained some momentum lost in September but was, nonetheless, weak in the context of historical data," Markit said in the report.
"Expansions of new orders and output supported the overall strengthening of operating conditions. However, new work from export markets continued to fall."
Official data released last month showed factory output in August rose 4.1 per cent from a year earlier, up from 3.8 per cent in July.
PMI data suggested that based on month-on-month change, September was the worst month for Indian factories since March 2009, when output shrank.
A rebound in global stock markets in October, however, could boost confidence in Asia's third largest economy.
The BSE Sensex climbed almost 8 per cent in October, after hitting a 20-month low of 15,745 points earlier in the month. World stocks soared around 14 per cent last month.
China's big factories, meanwhile, ran at their slowest pace in almost three years in October as new orders and exports slowed, but smaller firms are showing signs of a fight back against a deteriorating global backdrop, purchasing managers indexes showed on Tuesday.
China's official PMI recorded its lowest reading since February 2009, coming in at 50.4 for October compared with September's 51.2, according to the China Federation of Logistics and Purchasing (CFLP), which compiles the index on behalf of the National Bureau of Statistics.
In India, high interest rates are making it harder for companies to borrow and invest.
The Reserve Bank of India raised interest rates for the 13th time last week since early last year, but signalled an inclination to leave rates on hold in coming months on expectations that persistently high inflation will begin to ease.
Official wholesale price inflation has stayed stubbornly above 9 per cent for 10 consecutive months. The input and output price indexes from the latest India PMI fell slightly but still pointed to high inflation.
Economists in a recent Reuters poll expected Indian inflation to average 8.8 per cent in the fiscal year ending March 2012 before falling to 7.0 per cent in the following year.
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