'Service sector appears to be least optimistic'

Mumbai, July 14: The service sector in India appeared to be least optimistic according to an quarterly survey of business expectations done by Dun&Bradstreet.

The Business Optimism Index for Jul-Sep 2007 was on a dip by about 17 per cent at 167.3 against 201.2 in the previous quarter.

According to the report, all six optimism indices, namely volume of sales, net profits, selling prices, new orders, inventory levels and employees have decreased as compared to the previous quarter.

''The services sector appears to be least optimistic in its expectations, due in part to the rising rupee. Given the sector's significant proportion in the overall sample, this has lowered the composite business optimism index, quarter-on-quarter,'' Chief Operating Officer of D&B India, Kaushal Sampat said.

However, on a year-on-year basis, business confidence continues to remain high. Going forward, the monetary policy stance of the Reserve Bank of Indaia (RBI) and the progress of the monsoons will play a key role in determining business expectations, he added.

The business expectations survey was conducted in the month of June, at a time when sentiment in the domestic stock market was highly upbeat, boosted by strong foreign fund flows.

UNI