Sell-off, telecom meltdown continue

Font Size

Print

Feedback

Email

Discuss

• Discount UK Shopping

Related Articles

TRAI starts process for 4G servicesPM refers BSNL’s tender issue to Pitroda committeeFew come calling for RCom asset sale

Mumbai: The stock market saw the steepest fall after August on Tuesday as benchmark indices fell for the sixth straight trading session on huge sell-off in heavyweight stocks and weak cues from global markets.

The pressure on telecom stocks continued as Reliance Communications fell 5.7% to close at Rs 165.8, in it seventh straight day of losses. Though its rival Bharti Airtel closed on the positive zone, the pressure on telecom stocks persisted. In the current year, RComm slid by 27% and Bharti by 16% when the benchmark Sensex jumped 64%.

Analysts like Arup Misra of Elara Captial said RComm could face more selling pressure if the first 3G auction is held only for the GSM players, which the company is not. This will delay its entry into the new field. The company on Saturday announced that its net profit slipped 52% in the September quarter. Credit Suisse Group AG has slashed its estimate for the stock by a further 17%, opening up the possibility that the earnings for the entire telecom sector is up for re-rating on concerns over their low-tariff revenue plans.

In a highly volatile market, realty, metal and oil & gas stocks, too, fell sharply. Reliance Industries lost Rs 110.60 or 5.73% to close the day at Rs 1,820.65 on reports that the Comptroller and Auditor General of India has constituted a team to do a special audit of the company’s books to ascertain its investment in the K-G D6 gas field.

However, it was the metal major Hindalco which led the rout with a 10% erosion in price; closing at Rs 109, as its earnings were way off analysts’ estimates.

The dollar’s return to strength has again shoved some money out of emerging markets, while the absence of short-term triggers made the Indian markets under-perform. According to provisional figures, foreign institutional investors were net sellers at Rs 874.26 crore while domestic institutional investors bought stocks worth Rs 751.95 crore on Tuesday.

The 30-share Sensex of the Bombay Stock Exchange was down by 491.34 points or 3.09% to end the day at 15,404.94 points.

The broader S&P CNX Nifty of the National Stock Exchange lost 147.80 points or 3.14% and closed at 4,563.90 points.