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Vodafone Idea shares decline 6%, Airtel shares 3%;  Why telecom stocks are down

Shares of Vodafone Idea and Bharti Airtel fell more than 6 and 3%, respectively, on Friday, as Indian stocks recorded their biggest slump since early April. The 30-share benchmark BSE Sensex fell more than 1,300 points as suspicious investors resorted to selling amid growing fears about the discovery of a new variant of the coronavirus in South Africa that threatens block the fragile global recovery.

Shares of Vodafone Idea were down 6.4%, falling to Rs 10.90. It was trading at Rs 11 at 10:40 am. Bharti Airtel shares fell 2.8%, falling as low as Rs 743.90. The stock was trading at Rs 748.05.

Earlier this week, data from Trai showed that Vodafone Idea lost 10.77 lakh subscribers in September, while Bharti Airtel added 2.74 lakh subscribers. Compared to Airtel’s subscriber base of 35.44 crore in September, Vodafone Idea’s subscriber base fell to 26.99 crore.

Vodafone Idea had recently increased entry-level tariffs by up to 25% as the heavily indebted telecommunications company battles liquidity issues. The Vodafone Ideas basic plan which previously cost Rs 79 with a validity of 28 days will now cost Rs 99.

Nifty and Sensex are down more than 2% on Friday after the World Health Organization reported a new COVID variant – B.1.1.529 – indicating a large number of mutations in the new variant with an unusually high number of mutations. South Africa has already detected 22 cases of the new variant, the National Institute of Communicable Diseases said.

The Indian government on Thursday called on all states and union territories to conduct rigorous screening and testing of all international travelers from South Africa, Hong Kong and Botswana where several cases of ‘A variant of COVID-19 B.1.1529 has been reported.

At 10:40 am, Sensex was down more than 1,372 points to 57,422 and Nifty had weakened 411 points to 17,124. Larger markets also fell, with mid caps falling more than 796 points or 2.30% at 30,129.

(Edited by : Ajay Vaishnav)


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