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Sensex snaps 3-day gaining spree to end in red, Nifty closes below 8,800; Airtel, Idea tank up to 11%

BT Online     September 1, 2016

Snapping three session long gaining spree, the S&P BSE Sensex on Thursday settled 28 points lower, while the broader Nifty50 closed below its key 8,800-mark.

The headline indices ended flat as auto makers extended recent gains on expectations of rising sales, while telecom firms such as Bharti Airtel slumped after Reliance Industries unveiled plans to offer free local voice calls on its new mobile network.

The 30-share index ended the day at 28,423, down 28.69 points, while broad-based 50-share index quoted 8,774, down 11.55 points at close.

Sentiment was also somewhat subdued after data released late on Wednesday showed economy grew at a much lower-than-expected 7.1 per cent in the April-June quarter, its slowest pace in 15 months.

But that was offset after a private survey on Thursday showed factory activity expanded at its fastest pace since mid-2015 in August, helped by surging new orders, while price increases remained modest.

Meanwhile, wireless services providers slumped after Reliance Industries Chairman Mukesh Ambani said the company would make all domestic voice calls and roaming free and that data would be priced well below its competitors.

"This is a sectoral issue but it is definitely dragging down the index a bit," said Anand James, chief market strategist at Geojit BNP Paribas Financial Services.

"Jio comments could see a tariff change from other companies and it's safe to say that investors are cautious of the telecom sector at the moment."

Bharti Airtel fell 6 per cent to its lowest since February 3, while Idea Cellular dropped 11 per cent to its lowest in nearly four years. Reliance Communications was also down 8.81 per cent.

Cement stocks declined after the country's competition watchdog imposed a fine of 63.2 billion rupees ($943.57 million) on 10 cement companies for price fixing.

ACC, Ambuja Cements and UltraTech Cement fell up to 5 per cent.

(With inputs from Reuters)

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