Services growth in India slows down, IT and telco stocks tank amidst D-street carnage

The growth in India's dominant services industry continued to lose momentum, revealed global survey.

Soma Tah
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BANGALORE, INDIA: Stock market tumbled down today, with both the indices ended at its lowest level in 2015. The Sensex dipped 722.77 points and the Nifty plunged 227.80 points in trade today led by losses in banking, IT services and FMCG majors, etc.


While a huge sell-off was triggered by the concerns over GST and other reforms, there were other factors as well.  First, almost all the IT services companies have reported weak earnings for the March quarter. Second, the growth in India's dominant services industry also continued to lose momentum, revealed the HSBC India Composite Purchasing Managers’ Index (PMI) that tracks private sector activity. The PMI fell to a six-month low in April as demand remained soft.

IT services and telecom majors like TCS, Infosys and R-Comm slipped below their 200-day moving average.

All the major services players saw declines with TCS dipping 2.18 per cent, Infosys 2.07 per cent, Tech Mahindra 0.17 per cent, and HCL Tech 2.28 per cent. Among the telcos,  R-Comm and Idea Cellular dipped 7.28 per cent and 3.94 per cent respectively.

The only saving grace was Bharti Airtel, which outperformed despite weakness in the market. It gained 0.81 percent after MSCI increased the weightage of the company in the MSCI India Index to 2.6 per cent from 1.3 per cent, effective from June 1, 2015.

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