Indian factory growth fell for the third month in a row in July as a long series of interest rate hikes and faltering global demand weighed on new orders and output growth.

The HSBC Markit Business Activity Index, based on a survey of around 500 companies, fell to a 20 month low of 53.6 in July from 55.3 in June, though it remained above the 50 mark that separates growth from contraction for the 28th consecutive month.

The July reading was the weakest expansion since late 2009 and reflected the dampening of demand from key markets such as the United States and euro zone, which are reeling from their own respective debt crises.

Mr Leif Eskesen chief economist for India & ASEAN at HSBC said that "The momentum in the manufacturing sector eased further in July as sequential growth in output and new orders slowed.”

(Sourced from FE)