Domestic stock markets gave up all of the weekly gains in the last session of the holiday-shortened week, declining for three out of four days. The S&P BSE Sensex index lost a total 87.62 points – or 0.21 per cent – for the week and the broader NSE Nifty benchmark shed 32.6 points (0.27 per cent), to settle at 41,170.12 and 12,080.85 respectively. Going forward, analysts expect some revival in the economy which is staring at its worst pace of expansion in more than 11 years.
“Market during the week whipsawed after initial weakness due to the coronavirus outbreak. But it later bounced back at the close of the week keeping aside all fears of a slowdown on a global health emergency front,” said Jimeet Modi, founder and CEO, SAMCO Securities & StockNote.
“It is heard that China is slowly reducing curbs and hopefully the economy is likely to come back to normalcy. But nonetheless risk does remain.”
Telecom stocks remained in focus during the week, as service providers including Bharti Airtel and Vodafone Idea scrambled to clear government dues following notices from the telecom department asking them to clear dues immediately or face “necessary action“.
Last week, the government ordered mobile carriers including Vodafone Idea to immediately pay thousands of crores of rupees in dues after the Supreme Court threatened the companies and officials with contempt proceedings for failing to implement an earlier ruling.
Analysts covering the country’s telecoms sector say Vodafone Idea is the most fragile of its three major wireless carriers and if it shuts shop, the market would shape up as a duopoly of rivals Bharti Airtel and Reliance Industries’ Jio.
“Telecom is one space where no other institutional investor has increased the stake but mutual funds have. Going ahead, telecoms may take a long time to deliver returns given the burden of huge debt, spectrum payments along with mandatory investment in 5G,” said Mr Modi of SAMCO Securities.
The government will release data on GDP or gross domestic product expansion for the October-December period by the end of next week. Analysts will closely monitor the numbers for any sign of recovery in the ailing economy.