Indian bourses extend early losses amid selling in IT, TECK stocks

Local equity benchmarks extended losses to continue its weak trade in early afternoon session on account of selling in frontline blue chip counters. The sentiments remained down-beat with Chief Economic Adviser Arvind Subramanian’s statement that  overemphasis on renewable energy would create a 'double whammy' for the government by reducing the viability of thermal power plants and raising bad loans of state-owned banks. Further, weak global cues and heavy selling in IT, TECK and Healthcare stocks, also dragged the major indices down. The markets didn’t took note of the real estate consulting firm CBRE South Asia’s report that India has surpassed China in the global Retail Development Index in 2017, indicating growing prominence of the country as a preferred retail destination for global brands. Meanwhile, the rupee rebounded by 4 paise to 64.11 against the US currency in early deals following sustained bouts of dollar selling by banks and exporters. In scrip specific development, HPCL was up by over two and half percent after inking a joint venture agreement (JVA) with the Rajasthan government for the upcoming mega petroleum refinery in Barmer at a cost of Rs 43,129 crore.

On the global front, Asian markets were trading mostly in red, with investors in a risk-averse mood as the ongoing political turmoil in Washington raised doubts about President Donald Trump's ability to push through his economic agenda. Back home, the BSE Sensex is currently trading at 31532.66, down by 262.80 points or 0.83% after trading in a range of 31496.13 and 31729.88. There were 9 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.27%, while Small cap index was down by 0.73%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.31%, Telecom up by 1.30%, FMCG up by 0.80%, Energy up by 0.65% and PSU up by 0.10%, while IT down by 2.72%, TECK down by 2.08%, Healthcare down by 1.96%, Realty down by 1.07% and Metal down by 0.99% were the top losing indices on BSE.

The top gainers on the Sensex were TCS up by 1.77%, Power Grid up by 1.44%, ITC up by 1.43%, Bharti Airtel up by 1.07% and Hindustan Unilever up by 0.90%. On the flip side, Infosys down by 8.34%, Sun Pharma down by 3.54%, Cipla down by 1.83%, Lupin down by 1.74% and Tata Motors down by 1.39% were the top losers.

Meanwhile, a joint study carried out by the industry body Associated Chambers of Commerce & Industry of India (ASSOCHAM) and KPMG has found out that the telecommunications sector in India will create as many as 30 lakh jobs by 2018 on the back of rapid 4G technology deployments, rising data consumption, introduction of digital wallets and popularity of smartphones. In addition, study revealed that emerging technologies such as 5G, M2M and the evolution of Information and Communications Technology (ICT) are expected to create employment avenues for almost 870,000 individuals by 2021. 

The study stated that the optimistic job assessment comes at a time when the large telecom companies are battling financial stress and competition has led to a free fall in tariffs, putting revenue and profitability of all telcos under severe pressure. Further, it pointed out that the existing manpower in the sector may not be adequate both in number as well as in skill to cater to the upcoming demand. It also noted that the gaps in skills will need to be closed for diverse roles such as infra and cyber security experts, application developers, sales executives, infrastructure and handset technicians, and re-skilling will have to be undertaken for the existing manpower, given the technological advancements.

Assocham-KPMG study further said that Indian telecom sector is a highly price-sensitive market with a subscriber base that has majority pre-paid subscribers with lower average revenue per user (ARPU). It also explained that the increased debt burden on operators coupled with continuous pressure on profitability has affected the financial health of the telecom sector. It mentioned that with 646 million unique mobile subscribers, India is the second-largest mobile market in the world and will add more than 300 million new unique subscribers by 2020. It added that sector contribution to GDP is likely to touch 8.2 per cent by 2020. The study further pegged the capex investment during 2016-20 at $35 billion.

The CNX Nifty is currently trading at 9835.25, down by 68.90 points or 0.70% after trading in a range of 9816.30 and 9865.95. There were 18 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were BPCL up by 2.96%, Bharti Infratel up by 2.95%, Tech Mahindra up by 1.98%, Ambuja Cement up by 1.92% and GAIL India up by 1.79%. On the flip side, Infosys down by 8.41%, Sun Pharma down by 3.47%, Zee Entertainment down by 3.18%, Vedanta down by 2.77% and Cipla down by 1.94% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 decreased 232.22 points or 1.18% to 19,470.41, Hang Seng shed 170.54 points or 0.62% to 27,173.68, Taiwan Weighted was down by 48.04 points or 0.46% to 10,321.33, KOSPI Index declined 3.3 points or 0.14% to 2,358.37 and FTSE Bursa Malaysia KLCI slipped 3.29 points or 0.19% to 1,773.02.

On the flip side, Shanghai Composite increased 0.38 points or 0.01% to 3,268.81 and Jakarta Composite was up by 0.39 points or 0.01% to 5,892.34.