Telecom Stocks Outlook for the week – 29.06.2015 to 03.07.2015 Seen a mixed trend

Telecom Stocks Outlook for the week – 29.06.2015 to 03.07.2015
Seen a mixed trend

Stocks of major telecom companies that have been trading within a narrow range for the past two weeks are expected to show a mixed trend next week, with sector leader Bharti Airtel turning negative and Reliance Communications gaining some positive momentum. Bharti Airtel would face some resistance at higher levels and is expected to trade with a negative bias, while Reliance Communications is likely to remain positive. The rest of the telecom stocks are expected to remain range bound, taking cues from the benchmark indices that are expected to move sideways.

Domestic indices are likely to consolidate due to uncertainty over the Greece crisis and expectations that a better-than-expected monsoon may lead to a rate cut by the Reserve Bank of India. The telecom stocks are unlikely to rebound in near term due to weakness in the sector. The stocks of telecom firms have remained mainly range bound for the last many weeks. Stocks of Idea Cellular, which failed to consolidate even after increasing data charges, is likely to trade sideways.

Reliance Communications has seen some positive movement in their stock after the company announced that it had entered into exclusive discussions with Sistema on a potential merger of the Indian telecom business of Sistema Shyam Teleservices with itself through a share swap deal. Stocks of telecom firms may get some boost from the government's Digital India initiative which will be launched next week.