MANUFACTURING PMI SOARS, BUT...

With the relaxation in lockdown, manufacturing activities witnessed some improvement in June but still stayed in the contraction zone.

The Nikkei Manufacturing Purchasing Managers' Index, compiled by IHS Markit, rose to 47.2 in June as against 30.8 in May, but remaining below the 50-point mark that separates growth from contraction. The index had slipped into a contraction mode in April, after remaining in the growth territory for 32 consecutive months.

The rise in PMI, however, suggests that the worst may be over for the economy. "India's manufacturing sector moved towards stabilisation in June, with both output and new orders contracting at much softer rates than seen in April and May," said Eliot Kerr, economist at IHS Markit.

The April-June quarter this year has been estimated to be the worst since the PMI survey began in March 2005.