Market hits day's low; Vodadone Idea tanks 35%

Key equity indices slumped to the day's low in mid-morning trade after the Supreme Court (SC) on Wednesday made it clear that there could not be another attempt at calculating the adjusted gross revenue (AGR) dues of telecom firms. Banks shares tumbled as a collapse of an telecom operator could add to lenders' bad loan pile. Sentiment further deteriorated after S&P lowered India's growth forecast to 5.2% in 2020 amid coronavirus fears. The Nifty descended towards 8800 mark.

At 11:28 IST, the barometer index, the S&P BSE Sensex, was down 511.30 points or 1.67% at 30,067.79. The Nifty 50 index was down 153.05 points or 1.71% at 8,820.95.

 

The broader market tumbled. The S&P BSE Mid-Cap index was down 2.78% while the S&P BSE Small-Cap index was down 3.34%.

The market breadth was weak. On the BSE, 503 shares rose and 1540 shares fell. A total of 117 shares were unchanged. In Nifty 50 index, 14 stocks advanced while 36 stocks declined.

SC Verdict on Telecom Sector:

The media reported that a bench of the Supreme Court of India on 18 March 2020 held that no further objections to its orders would be allowed against payable dues. Justice Arun Mishra reportedly questioned the telecom companies' (telcos) self-assessment. The bench further added that the Department of Telecommunications (DoT) demand was confirmed by the court and self-assessment cannot be allowed when Supreme Court (SC) order clearly spells out the dues. He reportedly added that some telcos have requested 8-10 months' time to corroborate numbers of self-assessment, but this cannot be allowed.

Economy:

S&P Global Ratings on Wednesday lowered India''s economic growth forecast to 5.2% for 2020, saying the global economy is entering a recession amid the coronavirus pandemic. The agency had earlier projected a growth rate of 5.7% during the 2020 calendar.

Buzzing Index:

The Nifty Pharma index bucked weak market trend and rose 0.8% to 7,032.15. The index extended its winning run to second session and gained 1.05% in two trading sessions.

Glenmark Pharmaceuticals (up 5.35%), Aurobindo Pharma (up 3.8%), Sun Pharmaceutical Industries (up 2.59%), Lupin (up 1.9%), Divi's Laboratories (up 0.84%), Cipla (up 0.49%) and Piramal Enterprises (up 0.27%) were top gainers in Nifty Pharma index.

Stocks in Spotlight:

Shares of HSIL were down 1.96% at Rs 47.60 after HDFC Mutual Fund reduced 14.64 lakh equity shares or 2.03% stake held in HSIL. Post sale, HDFC Mutual Fund has decreased its shareholdings to 22.72 lakh equity shares or 3.14% stake from 37.37 lakh equity shares or 5.17% stake held earlier.

Vodafone Idea slumped 35.26% to Rs 3.14. On Monday (16 March), Vodafone Idea said it filed its self-assessment of the AGR liabilities with the Department of Telecommunications (DoT) on 6 March 2020, in which AGR liability principal amount of Rs 6,854 crore was determined for the period from FY 2006-07 to FY 2018-19. The company had earlier paid a sum of Rs 2,500 crore on 17 February 2020 and a further sum of Rs 1,000 crore on 20 February 2020 towards this liability. The company has on 16 March 2020 paid a further amount of Rs 3,354 crore to the DoT, being the balance part of the principal amount towards AGR liability. With the payment of Rs 3354 crore to the DoT, the company has paid the full principal amount of Rs 6854 crore towards the AGR dues.

Global Markets:

Asian markets were trading mixed on Wednesday as concerns about the widening coronavirus epidemic weighed against hopes policy support would combat its economic fallout.

In US, stocks rebounded on Tuesday, helped by the White House backing an $850 billion federal stimulus plan and a Federal Reserve move to backstop the commercial paper market by providing short term funding to businesses hit by the coronavirus pandemic

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