Telecom stocks nudge lower

The stock market languished in negative zone albeit trimming intraday losses in morning trade. At 10:15 IST, the barometer index, the S&P BSE Sensex, was down 296.05 points or 0.84% at 34,770.70. The Nifty 50 index declined 88.75 points or 0.82% at 10,671.85. The Sensex was trading below the 35,000 level after slipping below that level in intraday trade.

Weakness in global stocks weighed on sentiment on the domestic bourses. Global stocks declined after a stronger-than-expected US jobs report sent bond yields surging.

Among the secondary indices, the S&P BSE Mid-Cap index declined 1.35%. The S&P BSE Small-Cap index lost 1.76%. Both these indices underperformed the Sensex.

The breadth, indicating the overall health of the market, was weak. On the BSE, 1,933 shares fell and 421 shares rose. A total of 91 shares were unchanged.

Telecom and telecom related infrastructure stocks declined. Reliance Communications (down 2.3%), Idea Cellular (down 0.28%) and Bharti Infratel (down 1.7%) edged lower.

Bharti Airtel advanced 3.2% after the company announced today, 5 February 2018 that Singapore Telecommunications (Singtel), Asia's leading communications and ICT solutions group and a long term partner of Airtel, will invest Rs 2649 crore in Bharti Telecom (Bharti Telecom), the promoter company of Airtel through preferential allotment of shares. The transaction is subject to the shareholders' approval of Bharti Telecom. The funds raised will be used towards debt reduction.

With this investment, Singtel's total stake (along with its affiliates) in Bharti Telecom will increase to 48.9%. Singtel currently holds 47.17% stake in Bharti Telecom. Bharti Enterprises continues to hold over 50% stake in Bharti Telecom. The announcement was made before market hours today, 5 February 2018.

Auto stocks were mixed. Hero MotoCorp (down 0.9%), Bajaj Auto (down 0.76%), Eicher Motors (down 0.36%) and Mahindra & Mahindra (down 0.2%) edged lower. Ashok Leyland (up 1.02%) and Maruti Suzuki India (up 0.39%) edged higher.

Tata Motors rose 1.3% ahead of its October-December 2017 quarterly results today, 5 February 2018.

Jindal Drilling & Industries fell 5.66% after the company reported net loss of Rs 2.30 crore in Q3 December 2017 as compared with net profit of Rs 7.65 crore in Q3 December 2016. Total income dropped 66.37% to Rs 40.17 crore. The result was announced after market hours on Friday, 2 February 2018.

P I Industries lost 3.68% after net profit declined 14.17% to Rs 80.65 crore on 10.51% rise in total income to Rs 553.83 crore in Q3 December 2017 over Q3 December 2016. The result was announced on Saturday, 3 February 2018.

Mayank Singhal, Managing Director & CEO, PI Industries said that Q3 December 2017 represented a resumption of growth in exports, complemented by excellent growth of some newly launched brands in India. Government of India's strong emphasis and focused initiatives to substantially increase the farm income is also expected to drive growth of agri-input industry in the coming years, Singhal added.

On the macro front, Markit Economics will unveil the result of a monthly survey on the performance of India's services sector in January 2018 at 10:30 IST today, 5 February 2018. The Nikkei Services PMI in India jumped to 50.9 in December of 2017 from 48.5 in the prior month.

Meanwhile, minister of railways and coal Piyush Goyal in a written reply to a question in Rajya Sabha on Friday, 2 February 2018 stated that the supply of coal to the power sector has risen to 210.3 million tonnes (MT) in the first six months of this fiscal against 195.2 MT during the corresponding period of 2016-17 thus recording growth of 7.74% (provisional).

Overseas, Asian stocks edged lower following a sharp decline in US stocks. Data released today, 5 February 2018 showed that the Japan Nikkei Services purchasing managers' index (PMI) increased to 51.9 in January from 51.2 in December 2017.

China's Caixin services PMI rose to 54.7 in January from December's 53.9, expanding at its fastest pace in almost six years, data released today, 5 February 2018 showed. The 50-mark separates growth from contraction on a monthly basis.

US stocks fell sharply on Friday, 2 February 2018 on surging bond yields after a stronger-than-expected jobs report. Data released over the weekend showed that US job growth surged in January and wages increased further. Nonfarm payrolls jumped by 200,000 jobs last month after rising 160,000 in December, the Labor Department said on Friday, 2 February 2018. The Federal Reserve has earlier forecast three rate hikes for 2018.

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