Business sentiment falls for first time in three months

Mumbai: Indian business sentiment fell for the first time in three months in March as companies faced lower demand amid rising input prices on the back of the weak rupee. The MNI India Business Sentiment Indicator, a gauge of current sentiment among BSE-listed companies, fell to 62.7 in March from 63.5 in February.

The decline in sentiment was led solely by manufacturing firms, offsetting last month’s rise in confidence. In contrast with last month, the survey said fewer firms reported an increase in both new orders and export orders, and they were also less bullish on future demand.

However, Philip Uglow, chief economist at MNI Indicators, noted that the decline in confidence in March was relatively modest and sentiment is still up from the recent trough in December. The MNI India Business Sentiment Indicator averaged 62.7 in the three months to March, up slightly from 61.3 in Q3.

Firms faced higher prices for their inputs, companies raised the prices and expected another increase further in the next three months.