Telecom Stocks
Outlook for the week – 27.06.2016 to 01.07.2016, Seen mixed; sector guarded
from Brexit hit
( www.rupeedesk.in )
Stocks of telecommunication services companies are seen
trading mixed next week as the sector is
considerably shielded from the volatility in European
markets that will weigh on Indian stock indices.
In a historical event that is likely to have prolonged
repercussions on financial markets across the
world, UK yesterday voted to exit the European Union. Based
on opinion polls by a number of
international media outlets ahead of the referendum, the
market had factored in a "Bremain," or UK
continuing the 43-year membership.
Results of the referendum, which showed 52% votes from 382
polling constituencies in favour of
UK's exit or 'Brexit', sent shockwaves around the world.
Mirroring decline in global indices, NIFTY 50 ended down 2.20% at 8088.60 points, while S&P BSE Sensex
ended 2.24% lower at 26397.71 points from their previous week's close. All telecom stocks also
ended in the red on Friday's close. Telecom stocks are likely to remain range bound.
The anxiety is over the fact that businesses in Europe will
halt their investment in information
technology and telecom services until there is more clarity
on UK's trade policies. However, Indian
telecom majors have little or no revenue coming in from
Europe. The stock may see some movement
as the company announced late Friday that the scheduled
merger of its arm Airtel Bangladesh with a
subsidiary of Malaysia's Axiata Group Bhd has been postponed
to late September from June earlier.
Idea Cellular Ltd is seen weak on the charts and is likely
to continue its downward trend. The analyst
expected Reliance Communications Ltd and Tata Communications
Ltd to rise over the next week.
Telecom stocks, however, may see some volatility as traders
roll over positions to the July derivatives
contracts
ahead of the expiry of June series on Thursday.