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Sensex flat; telecom firms slump on Reliance Industries’ 4G plans


Indian shares were flat on Thursday as auto makers extended recent gains on expectations of rising sales, while telecom firms such as Bharti Airtel Ltd slumped after Reliance Industries Ltd unveiled plans to offer free local voice calls on its new mobile network.

Sentiment was also somewhat subdued after data released late on Wednesday showed India’s economy grew at a much lower-than-expected 7.1 percent in the April-June quarter, its slowest pace in 15 months.

But that was offset after a private survey on Thursday showed factory activity expanded at its fastest pace since mid-2015 in August, helped by surging new orders, while price increases remained modest.

The Nifty was down 0.02 percent at 8,784.40 as of 0724 GMT, while the Sensex was unchanged at 28,457.72.

The Nifty Auto Index was up about 0.8 percent, with Tata Motors and Mahindra and Mahindra gaining over 1 percent each ahead of August auto sales data scheduled later in the day.

The sub-index has surged around 20 percent so far this year to a record high on hopes that consumers would buy more vehicles on the back of good monsoon rains and the approval of the 7th Pay Commission.

Meanwhile, wireless services providers slumped after Reliance Industries Chairman Mukesh Ambani said the company would make all domestic voice calls and roaming free and that data would be priced well below its competitors.

“This is a sectoral issue but it is definitely dragging down the index a bit,” said Anand James, chief market strategist at Geojit BNP Paribas Financial Services.

“Jio comments could see a tariff change from other companies and it’s safe to say that investors are cautious of the telecom sector at the moment.”

Bharti Airtel fell more than 9 percent to its lowest since Feb. 3, while Idea Cellular dropped as much as 8 percent to its lowest in nearly four years. Reliance Communications was also down 0.93 percent.

Cement stocks declined after the country’s competition watchdog imposed a fine of 63.2 billion rupees ($943.57 million) on 10 cement companies for price fixing.

ACC Ltd, Ambuja Cements Ltd and UltraTech Cement Ltd fall between 1 percent and 1.7 percent.

(Reporting by Arnab Paul in Bengaluru; Editing by Subhranshu Sahu)

Article source: http://feeds.reuters.com/~r/reuters/INbusinessNews/~3/pZ4DWCJtn9Q/india-nifty-sensex-bse-nse-jio-idINKCN1173XK