New Delhi, July 3 -- India's services sector expanded at its slowest pace in 17 months in June, with the HSBC India Services PMI Business Activity Index, compiled by S&P Global, falling to 57.4 from 59.8 in May.

Weak domestic demand and reduced client interest weighed on sales and output growth, the monthly survey showed on Friday.

Despite the moderation, the reading remained comfortably above both the neutral 50.0 mark and the long-run average of 54.4, keeping the sector firmly in expansion territory.

New order growth, however, slowed to its weakest pace in more than two-and-a-half years, while hiring activity remained broadly stagnant and business confidence weakened.

Pranjul Bhandari, Chief India Economist, HSBC, said, "The loss of...