Sensex closes flat as Indian telcos raise tariffs by up to 40 per cent

Growth worries following the dismal second quarter GDP numbers led most stocks to end lower on Monday which was most visible in the broader markets as the BSE mid-cap index lost nearly 1 per cent.

The benchmark, Sensex, however, ended the day flat owing to the gains made by index-heavyweight Bharti Airtel and Reliance Industries (RIL). The gaines came after the telcos raised tariffs by up to 40 per cent, one of the sharpest ever hikes.

Auto stocks lost the most on Monday as the November sales figures showed little signs of recovery in the sector. Eicher Motors lost over 5 per cent, TVS Motor closed over 2 per cent lower and Maruti Suzuki declined 1 per cent in trading.

The benchmark Sensex ended the day at 40,802.17, while the Nifty settled at 12,048.20. Of the 50 Nifty50 scrips only 20 managed to log gains while remaining 30 declined.

“Despite positive sentiment in the global market due to better than expected manufacturing data in China, the domestic market traded range bound on account of weak GDP and auto sales, and ahead of the RBI’s monetary policy this week,” said Vinod Nair, Head of Research at Geojit Financial Services.

The market hopes for further government stimulus and ease in interest rates to revive the slowing economy, he said.

Weakness was broad-based, while telecom stocks jumped on account of aggressive tariff revision, he added.

Meanwhile, a day after Finance Minister Nirmala Sitharaman hit out at the government critique saying espousing of personal views might hurt national interest, another Bharatiya Janata Party (BJP) member of Parliament on Monday hit headlines by rejecting the gross domestic product (GDP) numbers.

Speaking in the Lok Sabha, Nishikant Dubey dismissed the economic indicator by saying GDP numbers need not be taken seriously as they were not words of a religious book.

Quoting Simon Kuznets, who developed the modern concept of GDP, Dubey said, the GDP might not be accurate and was not of much use. “When GDP came in 1934, Kuznets said, I quote ‘the valuable capacity of human mind to simplify a complex situation in a compact characterisation becomes dangerous when not controlled’,” he said.

“This was said by Kuznets that it’s not right to consider the GDP as gospel...the Bible, the Ramayana or the Mahabharata. The GDP would not be of much use in the future,” said the BJP member from Godda in Jharkhand.

The remark has come in the wake of criticism of the government’s economic policies from several quarters after the GDP growth rate for the July-September quarter declined to a 6-year low of 4.5 per cent.

The economy has been witnessing slowdown in the past few months, and fears of recession have cropped up. The government, however, is of the view that there is no recession at the moment and its recent measures would soon bear fruit.

In another statement that grabbed the limelight was Sitharaman’s tweet. Responding to the recent comment of industrialist Rahul Bajaj over fear among the people about criticising the government, Sitharaman said it was better to seek an answer than spreading one’s own impressions or opinion, as spreading of one’s personal views might hurt the national interest if it gained traction.

In a tweet on Sunday, she also said questions or criticisms were heard, answered and addressed to.

“Home Minister @AmitShah answers on how issues raised by Rahul Bajaj were addressed. Questions/criticisms are heard and answered/addressed. Always a better way to seek an answer than spreading one’s own impressions which, on gaining traction, can hurt national interest,” Sitharaman tweeted.

At an event here over the weekend with Home Minister Amit Shah in the audience, the Bajaj Group Chairman raised the concern that although the government was “doing good”, there was “no confidence” among the public and the industry whether the government would appreciate if it was criticised.

To this, Shah responded by saying there was no need to be afraid. “If someone has been written about the most, that’s us,” Shah said.

After Shah’s response, Biocon CMD Kiran Mazumder Shaw tweeted: “Will be happy to share my views with govt if asked.”

Earlier on Monday, the IHS Markit India Manufacturing Purchasing Managers’ Index (PMI) showed a higher index reading of 51.2 in November 2019 over the 50.6 reported for October.

Indo-Asain News Service