Mumbai: Key equity indices closed lower on Thursday, dragged down by telecom and bank stocks that declined after the Supreme Court upheld the definition of adjusted gross revenue (AGR) provided by the department of telecommunications, allowing the government to recover Rs92,000 crore in past dues.

The Sensex fell 38.44 points, or 0.1%, to close at 39,020.39, while the Nifty closed at 11,582.60, down 0.2%.

The apex court order comes as a huge blow for private telcos, who have been running losses for the past many quarters and show no signs of making money in the near future. Vodafone Idea slumped 22% but Bharti Airtel pared losses and gained 3%.

"Bharti Airtel shares are up even though it will be impacted by the SC order; this is because investors are pricing in a two-player market, with the assumption that Vodafone Idea will not be able to survive under the weight of the penalty," said analysts at two domestic institutional brokerages requesting anonymity.

Reliance Industries Ltd, parent of Jio which started services only in 2016 and owes the least in dues, gained 3.1% to close at 1436.25. The BSE Telecom index plunged 0.7%.

Shares of banks, with exposure to telecom companies also declined. Yes Bank closed 5.8% lower, State Bank of India 4.7%%, Indusind Bank 4%, RBL Bank 3%, Federal Bank 2.8%. BSE Bankex fell 1.2%.

Shares of Grasim Industries, which has an exposure to the telecom sector via its 11.55% stake in Vodafone Idea, slumped 4.4%.

In the broader market, the BSE Mid-Cap index fell 0.4%, while the Small-Cap index was down 0.1%. The market breadth was negative. On the BSE, 1075 shares rose, while 1380 fell. A total of 164 shares were unchanged. On the Nifty, 20 stocks advanced while 30 declined.

In what may have arrested losses in the market, the Bharatiya Janata Party (BJP) and Shiv Sena alliance is all set to return to power in Maharashtra.

Haryana, meanwhile, is headed for a hung Assembly as no party seems to be in a position to cross the halfway mark in 90-seat House. The ruling BJP was leading in 33 seats, while Congress was ahead in 29 seats, according to the latest trend available from the Election Commission.

Maruti Suzuki India fell 0.7% to close at 7,390.40 after the company announced its Q2 numbers. India’s largest carmaker reported a 39.3% year-on-year decline in its net profit to 1,359 crore for the September quarter, while revenue fell 25.2% to Rs16,985 crore.

Castrol India surged 7.8% after the company’s standalone net profit jumped 25.3% to 188.40 crore for the September quarter. Net sales declined 8.4%.

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