Indices fall for 2nd day on SC ruling

The benchmark indices fell for the second straight session, on Friday, following a slump in banking shares.

This was triggered by the Supreme Court taking a strong note of telcos not complying with its order to pay ~1.47 trillion in statutory dues.

The Sensex fell 202.05 points, or 0.49 per cent, to close at 41,257.74, with 22 of its constituents closing with losses. The broader Nifty shed 61.20 points, or 0.50 per cent, to settle at 12,113.5, as the banking, auto, FMCG, and energy counters retreated.

The Supreme Court, on Friday, directed the top echelons of telecom firms to explain why contempt action should not be taken against them for non-compliance with its order to pay adjusted gross revenue (AGR) dues of ~1.47 trillion to the telecom department.

The order raised concerns over banks’ exposure to AGRhit telcos, mainly Vodafone Idea, which reported loss of more than ~6,000 crore for the December quarter.

Indusind Bank was the top loser in the Sensex pack, dropping 4.38 per cent, followed by Powergrid, SBI, Hero Motocorp and NTPC.

On the other hand, Bharti Airtel was the top gainer, spurting 4.69 per cent, with analysts saying the telecom sector could turn into a duopoly. Vodafone Idea, staring at statutory dues worth ~53,000 crore, slumped 23.21 per cent.

“The Supreme Court ruling on telecom players, instructing them to pay dues by March 17, will impact the asset quality of banks having decent exposure in the sector,” said Vinod Nair, head (research) at Geojit Financial Services.