Activity in India's service industry dipped in May as new orders stagnated, but business optimism was the highest since 2015 on expectations that demand will turn around, a business survey showed.

The Nikkei/IHS Markit Services Purchasing Managers' Index fell to 49.6 in May from April's 51.4, sinking below the 50-mark that separates growth from contraction.

The broader NSE index closed down 0.33 percent at 10,593.15, while the benchmark BSE index ended 0.31 percent lower at 34,903.21.

Larsen & Toubro (L&T) and Infosys Ltd pulled down both indexes, each closing nearly 2 percent lower.

Copyright Reuters, 2018