Telecom stocks rally on relief hope

Mumbai: Telecom stocks have been rallying for the past three days expecting relief from the government in dues payment as well as tariff hike plans announced by the telecom service providers.

Reliance Jio also announcing tariff hike plans for mobile voice call and data services in a few weeks time, a day after Vodafone Idea and Bharti Airtel announced tariff hike from December, further fired up telecom stocks on Wednesday.

Reliance Industries, promoter of Reliance Jio, closed with a gain of 2.57 per cent at Rs 1547.05 after soaring intra-day to a new 52-week high of Rs 1,571.85 on the BSE. Reliance’s market capitalisation inched closer to the Rs 10-lakh crore mark, touching a high of Rs 9,90,366.80 crore in the morning trade.

Vodafone Idea gained 17.44 per cent on the BSE, closing at Rs 7.07 and surged intraday to a high of Rs 8.15 on the NSE. Its shares have surged more than 150 per cent from recent lows after it declared record second quarter losses of over Rs 50,000 crore.

Bharti Airtel shares saw profit-taking after surging to a new 52 week high of Rs 452.95 on the BSE while another group company Bharti Infratel surged to a high of Rs 260 but later closed 3.64 per cent lower on profit taking. The BSE Telecom Index closed 0.23 per cent lower, pulled down by Bharti Group stocks.

Analyst are seeing current rally in telecom stocks as a reaction to the news on tariff hike from an oversold position.

Kishore P Ostwal, Chairman and Managing Director, CNI Research, said, “The rally in the telecom stocks is a reaction, since the sector was oversold on bad news it is seeing a temporary pullback, which won’t sustain, unless we come to know how much will be the tariff hike for voice call and data services. Since it was an oversold sector buying has to come.”

Santosh Meena, Senior Analyst, TradingBells, said, “The market is factoring that tariff rates in the telecom sector have bottomed out”.