<div>Growth in India's services sector eased in July as new orders slowed, prompting some companies to put hiring plans on ice, a survey showed on Tuesday.<br /><br />The HSBC Services Purchasing Managers' Index (PMI), compiled by Markit, fell to 52.2 in July from June's 17-month high of 54.4.<br /><br />The country's dominant services industry hit a rough patch in 2013 and overall activity shrank for nearly a year but starting to expand again in May. A reading above 50 denotes expansion while below signals a contraction.<br /><br />"Growth in the services sector softened in July after a big jump in the previous month. Nevertheless, the sector recorded its third consecutive month of expansion," said Frederic Neumann, co-head of Asian Economic Research at HSBC.<br /><br />China's services firms were in a similar situation. Official PMI data released on Monday (4 August) showed growth slipped to a six-month low in July as new orders rose at their weakest pace in almost a year.<br /><br />While order books were not in as bad a shape among Indian firms, some businesses did defer hiring plans. The employment PMI dipped below the break-even mark to 49.8 from July's 50.1.<br /><br />The services PMI data also showed input costs rose at a slower rate in July and that firms were able to pass on a slightly bigger portion to customers by raising prices.<br /><br />"Final prices were marked up at a faster pace to reflect rising costs, underscoring the need for the Reserve Bank of India to remain cautious about inflation risks," said Neumann.<br /><br />The RBI is expected to keep interest rates steady later on Thursday but toughen up its rhetoric on inflation amid fears of a spike in food prices if monsoon rains are below average.<br /><br />(Reuters)</div>
