Sensex ends 29 pts lower; telecom stocks plunge on RJio fears
Market benchmark BSE Sensex today erased its early gains to end lower by 29 points, halting 3-day winning run, following emergence of sell-off mainly in telecom stocks after new entrant Reliance Jio came out with free voice calls and cheaper data tariffs.
In early trade, investors seemed cautious in view of overnight dismal GDP data -- showing the economy grew at its slowest pace in six quarters -- and subdued infrastructure output data, while most of the participants preferred wait and watch policy in need of a direction ahead of US jobs report due tomorrow which would signal Fed's next move on rate hike.
The Sensex resumed higher at 28,459.09 and firmed up to a high of 28,548.85 on sustained buying by funds and retail investors. But, it fell afterwards to 28,386.61 before ending at 28,423.48, showing a loss of 28.69 points or 0.10 per cent.
The 50-share NSE Nifty moved down by 11.55 points or 0.13 per cent to 8,774.65 after touching a high of 8,813.25 and a low of 8,759.95 intra-day.
Telecom shares came under heavy selling pressure today after RIL Chairman Mukesh Ambani announced a slew of announcements to woo customers, offering them free voice calling and cheaper data tariffs.
Bharti Airtel with a plunge of 6.37 per cent to 310.70 was the worst hit from the Sensex pack. Idea Cellular tanked 10.48 per cent to Rs 83.70 -- its 52-week low on the BSE.
Surprisingly, RIL scrip also fell by 2.73 per cent to 1,029.15, becoming the second biggest loser in the index.
Vinod Nair, Head of Research, Geojit BNP Paribas Financial Services Ltd, said, "Market was very volatile, swinging between positive and negative territory. The telecom sector was the biggest loser followed by Cement. Telecom was negative due to the launch of Reliance Jio, while Cement was negative due to the penalty from CCI."
"We saw profit-booking today post the subdued domestic GDP and core industries data. Globally, investors are awaiting the US employment and payroll data which will be released tomorrow, which will give cues on FED rate hike," he added.
Sentiment turned somewhat weaker after data released yesterday showed the Indian economy grew at the slowest pace in the last six quarters at 7.1 per cent in the April-June period of current fiscal mainly on subdued performance of mining, construction and farm sectors.
Besides, the growth of eight core infrastructure sectors slowed to 3.2 per cent in July compared to 5.2 per cent in June this year due to subdued performance of coal, fertilisers, steel, cement and electricity segments.