India's Services Growth Eases to 17-Month Low as Markets Extend Rally

India's dominant services sector remained in expansion in June but lost momentum, with the HSBC India Services PMI Business Activity Index easing to 57.4 from 59.8 in May, its weakest reading in 17 months. Although comfortably above the 50 mark separating growth from contraction, the survey pointed to challenging market conditions and softer client demand, while hiring was broadly stagnant and business confidence weakened. Encouragingly, cost pressures eased and new export orders grew at the fastest pace in three months. The softer data did little to dent equities: benchmark indices extended their winning streak for a third straight session, with the Sensex and Nifty each adding to weekly gains. The rally was driven by positive global cues after weaker-than-expected US employment data strengthened expectations of a Federal Reserve interest-rate cut, boosting risk appetite. Realty, IT and pharma shares led the advance, while public-sector banks and auto stocks lagged. Easing crude oil prices and a firmer rupee further supported sentiment, though analysts noted the domestic momentum will be tested by the upcoming June-quarter corporate earnings season.