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Telecom stocks are expected to trade in line with the broad market next week. The broad market is likely to see some profit sales after the National Stock Exchange's 50-stock Nifty gained about 3.7% in the last two weeks. Most of the gains in the broad market during the last few sessions were led by gains in the oil and gas stocks as well as defensive stocks, which may seen some profit sales in the coming week. As most foreign institutional investors exited key portfolios owing to the weakness of the rupee, telecom stocks may also further see their FII exposure declining. FII exposure has now declined by almost three-fourths, from over 10% in 2008 to around 2.5%, primarily due to the expected fall in margins because of tariff wars and heightened competition, accompanied by ongoing regulatory challenges.
The underlying bias for Bharti Airtel and Idea Cellular remains positive, even when they have not been able to make substantial gains in recent weeks like Reliance Communications, bias for which remains weak. Bharti Airtel is expected to trade positively but will remain in a narrow range.
Telecom stocks are expected to trade in line with the broad market next week. The broad market is likely to see some profit sales after the National Stock Exchange's 50-stock Nifty gained about 3.7% in the last two weeks. Most of the gains in the broad market during the last few sessions were led by gains in the oil and gas stocks as well as defensive stocks, which may seen some profit sales in the coming week. As most foreign institutional investors exited key portfolios owing to the weakness of the rupee, telecom stocks may also further see their FII exposure declining. FII exposure has now declined by almost three-fourths, from over 10% in 2008 to around 2.5%, primarily due to the expected fall in margins because of tariff wars and heightened competition, accompanied by ongoing regulatory challenges.
The underlying bias for Bharti Airtel and Idea Cellular remains positive, even when they have not been able to make substantial gains in recent weeks like Reliance Communications, bias for which remains weak. Bharti Airtel is expected to trade positively but will remain in a narrow range.
