India services PMI jumps to three-month high in Dec: HSBC survey

"Inflation readings, meanwhile, eased a bit. With growth showing signs of recovery and inflation still elevated, the case for a policy rate cut is not yet convincing," Eskesen added.

"However, the RBI has clearly teed up for rate cuts in January-March."

The central bank has held interest rates steady since April, citing high price pressures, even as financial markets and the government have clamoured for rate cuts.

But after the RBI's meeting last month and in October, it said it was likely to ease policy rates in the January-March quarter, as inflation pressures are expected to ease.

A majority of economists polled by Reuters last month expect a total of 50 basis points of cuts in the benchmark repo rate by March, citing weak growth and a generally declining inflation trend.

A PMI survey released on Wednesday showed India's manufacturing activity surged to a six-month high in December, boosted by strong factory output and a spike in new orders.

HSBC India services PMI jumps to 3-mth high in Dec

New Delhi, Jan 4 (PTI) India's services sector expanded further in December registering the fastest pace of growth in three months - driven by a sharp rise in new business orders, an HSBC survey said.

The HSBC's Services Purchasing Managers Index (PMI) for December stood at 55.6, up from 52.1 in the previous month, signalling a sharp expansion in activity.

"The services sector provided some holiday cheer with activity fully recovering after two months of deceleration, led by a sharp rise in new business," HSBC Chief Economist for India and ASEAN Leif Eskesen said.

The index had witnessed significant decline in the previous two months – October, November. It had registered the fastest pace of growth in seven months in September.

The index has remained above the 50-mark which indicates expansion since November 2011.

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