Asian stock markets have opened the day on a weak note as oil prices rose further. Stock markets in Japan (down 1%), Taiwan (down 1.1%), Indonesia (down 1%) and Hong Kong (down 0.7%) are leading the losses. On the same lines, Indian stock markets have also opened the day on a weak note. Stocks from the metal and IT space are leading the pack of losers. However, stocks from the oil and gas space are trading flat.
The BSE-Sensex is trading lower by around 79 points (0.4%), while the NSE-Nifty is down by around 26 points (0.5%). Mid and small cap stocks are also trading weak, with the BSE Midcap index and BSE Small cap index down by 0.4% and 0.3% respectively. The rupee is trading at 45.23 to the US dollar.
The government has taken the first step towards cancelling licenses of telecom operators who have missed out their rollout obligations. In line with this, the government cancelled the Punjab license for Idea Cellular, the country's fifth largest mobile operator. It has also cancelled the Delhi and Mumbai licenses for Etisalat DB. Idea's license has been cancelled for not meeting rollout obligations as well as for violating license norms. The Punjab circle license is related to that issued to Spice Communications, which was acquired by Idea in 2008. As per the government's norms, a company cannot have overlapping licenses in any circles. Idea's overlapping licenses due to its acquisition of Spice Communications has been a long standing issue. With regards to Etisalat, erstwhile Swan Telecom, the licenses were cancelled for not meeting rollout obligations. The government had earlier in the year collected a penalty of almost Rs 3 bn from the new operators for not starting services on time as per the guidelines.
The stock of Idea Cellular is currently trading in the red. Other telecom stocks like Tata Tele, MTNL and Reliance Comm are also trading in the red.
IT stocks have opened the day on a weak note with Infosys, TCS and Wipro leading the losses. Infosys has revamped its brand positioning and vision statement to cater with dynamics of a changing global economy. The company has chosen to describe this new phase as Infosys 3.0. The idea is to move from a technology solutions company to a business solutions company. On the same lines, the IT major has changed its brand positioning statement from 'Win in the flat world' to 'Building tomorrow's enterprise'. The IT major is now focusing on building its business transformation and innovation capabilities. This is also a clear effort to compete better with global peers like IBM and Accenture.
Currently, 65% of company's revenue comes from its traditional business which is operational efficiency projects. On the other hand, business transformation deals and innovation/products business account for about 25% and 9.5% of the revenue respectively. Internally, the company aims to ensure that in the next 5-7 years all these three segments contribute equally.