Sensex falls for 4th day on telecom woes, coronavirus fears

Mumbai: The domestic stock market slipped for a fourth straight session on Tuesday, as investors remained on the sidelines due to lingering worries over impact of AGR ruling on Indian banks and coronavirus outbreak.

BSE’s 30-share Sensex shed 0.39 per cent or 161.39 points to close at 40,894.38, while NSE’s 50-share Nifty dropped 0.44 per cent or 53.30 points to close at 11,992.50 points.

Earlier in the day, Sensex fell as much as 1.08 per cent to 40,610.95 points while Nifty dropped 1.14 per cent to 11,908.05 points


Telecom companies owe Rs 1.47 lakh crore to the government, as per assessment by the Department of Telecom, however, telcos dispute the quantum.

With massive statutory obligation, the threat of a default, especially by Vodafone Idea, looms large. In case that becomes a reality, banks will have to bear the brunt as they have huge exposure to the telecom major.

Moreover, December quarter results disappointed analysts, with the much-awaited earnings recovery still remaining elusive.

Market at a glance
The bears were in charge with losers outpacing gainers in the ratio of nearly 2:1 on BSE.

The broader market underperformed, with BSE Midcap and Smallcap indices declining 0.60 per cent and 0.45 per cent, respectively.

All, but four sectoral indices closed lower. BSE Telecom was the biggest loser as it shed 4.16 per cent.

As much as two-thirds of 30 Sensex stocks closed lower. Mortgage lender HDFC dropped 1.13 per cent, and contributed the most to Sensex’s decline. Oil-to-telecom conglomerate Reliance Industries followed next as it dropped 0.83 per cent.

IT major Infosys and TCS bucked the trend and rose 1.02 per cent and 0.55 per cent, respectively. Top lender State Bank of India rose 1.08 per cent.

Vodafone Idea cracked 11.40 per cent after the telecom major said late on Monday that Care Ratings has downgraded its long term bank facilities and non-convertible debentures. The downgrade is on account of significant erosion in the overall risk profile of the company in the wake of absence of relief on modification plea relating to AGR dues on February 14. Peer Bharti Airtel slipped 2.80 per cent.

Late on Monday, Reliance Industries announced that TV18 Broadcast, Hathway Cable & Datacom and Den Networks will merge into Network18 Media & Investments, which will be an integrated media and distribution company with a revenue of Rs 8,000 crore. Following the news, these four companies saw their shares rose 14.71 per cent, 20 per cent, 10 per cent and 4.89 per cent, respectively.

Analysts’ views
"Nifty continued with sharp downside momentum, but was able to show a smart upside recovery from the lows towards the end. A small negative candle was formed with a long lower shadow. Technically, this pattern indicates formation of a bullish hammer-type candlestick pattern. This is positive indication and signals a possibility of upside bounce in the next session,” said Nagaraj Shetti, Technical Analyst at HDFC Securities.

Global market
European shares dropped on Tuesday as a revenue warning from iPhone maker Apple Inc sent shockwaves through the tech sector, highlighting the impact of the coronavirus outbreak on global demand and supply, Reuters reported.

The pan-European STOXX 600 index fell 0.8% by 0803 GMT, having ended at a record high on Monday after China outlined fresh stimulus measures to mitigate the virus’ economic impact.