Tech heavyweights spoil the show

Thu, 13 Mar Closing

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Failing to keep up with the momentum, IT heavy weights and banks reported maximum selling pressures in the last hour of trade. Consequently, the Indian equity markets closed the day on a pessimistic note. Stocks from the oil and gas and Auto sectors posted healthy gains today. The BSE Small Cap and the BSE Mid Cap indices were down by 0.2% and 0.6% respectively. The BSE-Sensex closed lower by 82 points and the NSE-Nifty was down by 24 points.

On the global front, Asian indices closed the day on a mixed note and European indices too opened the day on a mixed note. The rupee was trading at Rs 61.09 to the dollar at the time of writing.

The stocks from the Finance space closed the day today on a mixed note. Stocks such as Power Finance Corporation and Indiabulls Financial Services were leading the pack of gainers, whereas SREI Infra Finance and IFCI led the pack of losers.

As per a leading financial daily, the rating agency ICRA expects the credit growth for retail NBFCs to halve in 2013-14. The credit growth is expected to halve to 8-10% in FY14 as against 19% growth in FY13. During 9mFY14, the retail credit has grown by mere 5% as against 15% reported same period a year ago. The issues encumbered by segments such as commercial vehicle (CV), construction equipment (CE) and gold loans have hampered the credit growth of retail NBFCs. Delay in projects and mining issues have added to the difficulties of the CV and CE sectors. Further regulatory policies have restricted the gold loan demand adding to the woes of retail NBFCs. Besides, the asset quality concerns for retail NBFCs linger with NPAs moving up to 4.3% during the quarter ended December 2013 as against 3.5% in March 2013. The agency also expects the restructured assets for retail-NBFCs to hover in the range of 1.25-1.5% going forward.

Barring few such as AGC Networks, Mahanagar Telephone Nigam Limited (MTNL), Bharti Airtel, stocks from the Telecom sector closed the day on a weak note with Reliance Communications and Tata Communications leading the pack of losers.

The telecom user base numbers were announced for the month of January 2014 recently. On a month on month basis, the total telecom user base grew by 0.75%, as per telecom regulator - Telecom Regulatory Authority of India (TRAI). The share of urban telecom users stood at 59.86% as compared to 60% earlier, thereby indicating the addition largely coming from rural parts of the country. The monthly increase in rural subscriber base grew at 1.17% as compared to 0.47% for urban users. As for the wireless subscriber base, the same increased to 893.3 m as compared to 886.3 m in December 2013. Bharti Airtel added the maximum number of users during the month, adding 2.4 m users to its subscriber base, followed by Vodafone which added 1.78 m users during the month. The two companies had a total market share of 22.5% and 18.16% respectively. Idea Cellular on the other hand added 1.5 m users, while Reliance Communications added 0.4 m users. As for broadband numbers, the telecom regulator reported that top five broadband service providers constitute 82.57% of market share of total broadband subscribers.