It’s a bad day for the telecom stocks as all the major names like Bharti Airtel, Idea Cellular and Reliance Communications are trading with a loss of atleast 3% in each of these counters.
The decline is on concerns over possible high bidding prices at the spectrum auction next month after eight companies applied to bid, signaling much stronger competition than expected.
Also, now Reliance Industries, in the form of Reliance Jio is in the fray for the spectrum auction due to start on February 3. Credit Suisse says Reliance's entry could mean "intense" bidding at the auction, and increase competition in the sector in the longer term.
Now with increased competition, can the already established names withstand the competition? Also, should one rush into buy these stocks in these corrections?
Already flashing the red card early in the day was Credit Suisse which downgraded Bharti Airtel to "neutral" and Idea Cellular to "underperform" from "outperform", citing the higher-than-expected bid applications as a "negative surprise".
Answering these questions is Kunal Bothra, Technical Analyst from LKP Securities. Also, he shares his views on markets.
