New Delhi, Oct. 1 -- Business activity in India's manufacturing sector has lost a bit of momentum. The seasonally adjusted HSBC India Manufacturing Purchasing Managers' Index (PMI) hit a four-month low of 57.7 in September from 59.3 in August. New orders, output and input buying all rose at the slowest rates since May, while job creation retreated to a one-year low, said the PMI survey.

The drop in the headline index might be a one-off as manufacturers are confident that the reduction in goods and services tax (GST) will boost domestic demand. So, companies are signalling upbeat production forecasts for the coming year. The Future Output Index, a sub-index of the PMI that measures business confidence, hit a seven-month high in September....