At the end of a lackluster trading session the Indian indices finally settled way below the dotted line today. While BSE Sensex closed lower by around 345 points (down 1.7%), Nifty was down around 109 points (1.8%). Mid and small caps both faced selling pressure as the BSE-Midcap Index and the BSE-Smallcap indices were both down around 2%.
All major indices closed in the red today, with the realty index facing the maximum selling pressure (down almost 4%). The oil and gas sector also wasn’t spared (down 2.6%). Most Asian markets closed mixed today whereas Europe is trading weak currently. The rupee was placed at Rs 45.28 to the dollar at the time of writing.
Telecom major Bharti Airtel is scheduled to roll out its 3-G services by the end of this year. This service will be launched in the 13 circles where it won the spectrum in the auction held earlier this year. Now, the big question is whether the company will be able to make money on this service. The company plans to keep the service affordable and it will be priced in such as way to balance the investments that made in acquiring spectrum and building the infrastructure.
However, earlier in the year Sanjay Kapoor, CEO (India and South Asia) stated that he expects 3-G services to be priced higher on account of the high bid prices. The company plans to offer competitive tariffs in an innovative package. The company needs these services to help improve its ARPU (average revenue per user) levels. The company saw an almost 20% decline in ARPUs YoY in 2QFY11. This figure fell by Rs 50 from Rs 252 per month in September 2009 (2QFY10) to Rs 202 in September 2010 (2QFY11). The stock closed positive today.
The garment industry is on a nation-wide strike today to bring to the fore the plight that they have been facing due to the significant rise in raw material prices. The manufacturers and exporters of textile and apparel products, bring in export earnings of more than Rs 500 bn annually. They are seeking government intervention to check the rise in prices of cotton which have risen almost 60% YoY until September 2010.
Given that this sector is one of the most labour intensive and provides employment to 35 m people in India, lack of profitability could result in job losses at a mass scale. However, leading players such as Arvind Ltd and Alok Industries have not participated in the stir.