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Telecom Stocks Lead the Losses
Fri, 29 Apr 01:30 pm

The Indian stock markets are trading on a negative note in the post noon trading session. Most sectoral indices are trading weak with stocks from the telecom, realty and auto sectors bearing the maximum brunt.

The BSE Sensex is down by 139 (down 0.6%) while the NSE Nifty is trading lower by 44 points (down 0.6%). The BSE Mid Cap index and the BSE Small Cap index are also trading in the red, both down by 0.6% each. Gold (per 10 grams) is trading at Rs 30,011. Silver is trading at Rs 41,626 per kilogram. Crude oil is trading at Rs 3,086 per barrel. The rupee is trading at 66.50 to the US$.

Software stocks are trading weak with HCL Technologies and HCL Infosys leading the losses. As per Economic Times, India's IT industry is expected to post the seventh straight year of improving productivity. This is seen as automation adds to efficiency and drives down hiring rates among software services companies.

While the above data comes as a welcome breather for the IT industry that has been trying to protect profit margins, it raises concerns for engineering jobs in a sector that employs over three million people. And this trend is already in place. India's large IT firms are no longer hiring employees the way they were five years ago.

From what we have been seeing in our travels to various parts of the country, companies have begun to embrace automation. The India Letter team, for instance, travelled to a small town in the state of Kerala to visit a company that has invested heavily in automation in the otherwise labour intensive textile space. And this rising penetration of automation can pose a threat to the rising demand for jobs in India. It would lead to the elimination of millions of jobs over the next five to ten years.

As Devanshu Sampat, Research Analyst, states in one of the recent editions of The 5 Minute WrapUp titled This Threat Will Smack Your Company in the Face 'The automation and robotics trend is very real. And it is perhaps the biggest threat to India.'

Asad Dossani, editor, Daily Profit Hunter says that one American job is worth more than ten Chinese jobs.

Moving on to news from the sugar industry, as per a leading financial daily, the government has stated that there will not be sugar shortage in the country in the 2016-17 season starting October despite lower domestic output. This, as per the government, is because the total availability at 30-31 million tonnes would be enough to meet the demand.

This supply estimate for 2016-17 comes amid reports that India might become a net importer of sugar due to likely fall in domestic sugar output. Reports had stated that the output of sugar is projected to be the lowest in five years in FY17 due to two consecutive years of drought. Many parts of Maharashtra are going through a water crisis on the back of below normal monsoons for two consecutive years. And as per Vivek Kaul, editor, Vivek Kaul's Diary, the real issue for this water crisis in the state is the agricultural production of sugarcane.

However, the above announcement by the government could seemingly ease the worries of rising sugar prices and its impact on FMCG majors.

Moving on to the news of currency markets, the yen is witnessing maximum buying interest and has surged to an 18-month high against the dollar. This comes as the Bank of Japan (BOJ) in its policy review on Wednesday did not announce any expansion in its monetary stimulus and maintained its base monetary target at 80 trillion yen.

To keep a regular tab on the movements in the yen and other currencies, you can read weekly market commentary from the Daily Profit Hunter team. Their weekly commentary tracks the developments in the global economy as well as equity, currency and commodity markets.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

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1 Responses to "Telecom Stocks Lead the Losses"


Apr 29, 2016

What a joy indeed to read the content based on in-depth analysis with crystal clear information. Its a satisfying thing to read such articles for a voracious reader.

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