World Markets Simplified

The seasonally adjusted HSBC Markit Business Activity Index, based on a survey of over 400 firms, slipped to 55.0 in May from 59.2 in April, marking its twenty-fifth successive month above the 50 level that divides growth from contraction.

While the latest reading underlines a reasonably solid pace of growth in the services sector, its decline is an indication that continuous rate rises aimed at containing inflation are putting the brakes on India's rapid expansion.

The easing momentum for business activity and new business is evidence that policy tightening and high inflation is filtering through to growth, said Leif Eskesen, chief economist for India & ASEAN at HSBC.

All sub-indexes saw a fall when compared to April, with the exception of input costs and employment.

New business received by service companies remained strong but the pace of expansion slowed with the sub-index falling to its lowest level since October last year.

Among the sub-indexes, business expectations saw the steepest fall to 67.8 in May from 72.8 in April, as respondents, though confident of the sector's performance over the next 12 months, slightly tempered expectations as economic uncertainty loomed.

Data released earlier this week showed Asia's third-largest economy grew at its slowest annual pace in five quarters in January to March as consecutive interest rate hikes, aimed at reigning in soaring inflation, began to take effect.

Gross domestic product rose 7.8 percent from a year earlier, lower than 8.3 percent in the previous quarter and below the median 8.2 percent forecast in a poll.

While weaker-than-expected growth might cause the Reserve Bank of India (RBI) to raise rates in smaller increments, the survey showed price pressures will persist.

The RBI has no choice but to continue its tightening cycle to bring about a slowdown in domestic demand, which is sufficient to lessen capacity constraints and ease inflation pressures, Eskesen said.

Input costs increased markedly in May due to rising wage bills and raw material costs. Further inflation pressures are expected as the economy braces for an increase in government-controlled prices of diesel and cooking fuels.

Prices charged also rose in May as service providers transferred rising costs to consumers, but the slightly weaker pace suggested a slight reduction in margins.

Last month the RBI raised rates by half a percentage point, declaring some near-term growth would need to be sacrificed to tame inflation, which stood at 8.66 percent for April.

The service sector continued to add jobs with the index for employment signalling an increase in the pace of hiring.

Data released earlier in the week showed Indian manufacturing PMI dipped and factory growth eased globally, with the most pronounced slowdown seen in the United States.

 

 

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1. Ending weeks of offline misery after high-profile hack attacks, Sony's PlayStation Store is back online. Sony's thanking everyone for "patience" and notes the Store has been topped up with a lot of content (there's even a handy list of the new gaming goodness). But the "welcome back" free offers, given to PSN users as an apology for the extended outage, isn't yet live--it's in final testing. Presumably so Sony doesn't expose itself with yet another security hole.

2. YouTube now lets you license your uploaded video under Creative Commons. Essentially this means you can choose to give permission for other folk to reuse, rework, adapt and republish your efforts--with attribution to you as an original source. It's important because it lets YouTube become a bigger channel for newly produced content, which helps keep it relevant and growing. YouTube's even pre-arranged some 10,000 clips from C-SPAN, Al-Jazeera, and more.

3. In a bill which music industry patrons hope will set a trend, Tennessee has a new law that makes it illegal to use someone else's login credentials to listen to music or watch streaming TV content from systems like Netflix or Rhapsody. The Web Entertainment Theft legislation, which seems draconian because it's valid even if you have permission, is directed at hackers who resell passwords in bulk, but sponsors acknowledge it applies to everyone--particularly college-goers.

4. Apple just updated its OS X to defeat a persistent and tricky malware attack called Mac Defender that may be the highest profile "hack" of Apple's OS yet--although strictly it needs user interaction to "infect" a machine. But within hours the illegal coders behind the attack adjusted their system to circumvent Apple's new security. Apple's now got a system for daily security updates, but it's a sign malware attackers are targeting the oft-overlooked Mac.

5. Shaq--yup, that Shaq--just announced his retirement from the NBA via Twitter. Specifically O'Neal used Tout, a social video sharing system to make it a truly 21st century retirement posting. No letter, no newspaper leak, no press conference, just a simple, honest self-published social networking status update.

( Source: Fast Company )

Daily Digest Stockinvestips

Hill International, the U.S. construction consulting firm, received a 4.7 million-real ($3 million) contract to expand a wind farm in Brazil.

Hill’s recently acquired Brazil unit Engineering SA will oversee the installation of 61 additional turbines at a New Energy Options Geracao de Energia project in the northern state of Rio Grande do Norte, Marlton, New Jersey-based Hill said in a statement yesterday. The expansion will cost a total of 592 million reais.