India’s services sector activity slowed to the weakest in three months in August, tempering optimism about a strong rebound in the South Asian economy. The seasonally adjusted Service Sector Business Activity Index fell to 50.6 from 52.2 in July, according to a HSBC  index. A figure above 50 indicates expansion while one below 50 points to a contraction. Activity in the sector, which contributes about 60% to India’s gross domestic product, had contracted for 10 straight months until April as rising inflation, bureaucratic red-tape and weak government policies hurt business and consumer confidence. But sentiment has improved lately on hopes that the country’s new government will introduce policies to encourage investments.

(Wall Street Journal)