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India Inc. business confidence retreats in July

By Religare

Amidst the backdrop of heightened global economic uncertainty due to the ongoing debt woes in Europe and a deepening economic slowdown in China that has cast a shadow over Indian exports, business confidence in the country fell in the month of July, dashing optimism over the growth outlook in Asia's third biggest economy.

Deutshe Bourse's MNI India Business Sentiment Indicator, an index of current sentiment among BSE- listed companies, declined by 2.7 per cent to 65.3 this month from 67.1 in June.


July's India Inc. business sentiment reading came in below the 12-month average with the weak confidence attributed to moderating output and orders growth, in addition to sluggish exports.

The drop in business sentiment in July was witnessed across the manufacturing and services sector, a sign that the impact of the June's 25 bps interest rate cut by the RBI, the third such reduction in 2015, was only short-lived.

India's exports are treading water, falling for seven straight months through June as worries over Europe's debt troubles; US rate tightening fears and a deepening slowdown in China amidst an end to the global commodity super cycle make overseas clients trim spending.

"July saw business sentiment ebb slightly following June's improvement on the back of the last rate cut from the RBI. The Indicator is now lying a little below the 12-month average, while production is not too far from a two-year low", the report said.

Story first published: Monday, July 27, 2015, 12:40 [IST]
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