(Bloomberg) -- Indian stocks fell after the nation’s top court rejected a plea by telecom companies seeking more time to settle billions of dollars in dues and began contempt proceedings against them.
Banks, which have lent large sums to these companies, were among the biggest decliners, sending the S&P BSE Sensex Index down 0.5% at the close in Mumbai. The gauge reversed an earlier gain of as much as 0.6%, trimming its biggest two-week advance this year. The NSE Nifty 50 Index also slipped 0.5% on Friday.
The Supreme Court said Friday that operators including Vodafone Idea Ltd. and Bharti Airtel Ltd. -- owing a total of $13 billion in back-fees for spectrum and licenses -- must deposit the dues by March 17. While Vodafone Idea slumped 24%, Bharti Airtel rose as traders bet on better prospects for recovery in a market left with fewer carriers after the consolidation.
The ruling adds to the woes of lenders that are struggling with a mountain of bad loans in an economy poised to grow at its slowest pace in a decade. A gauge of bank stocks declined 1.1%.
“This is extremely negative for both telecom companies and banks as it is clear the payments have to be settled,” said Sameer Kalra, a strategist at Mumbai-based Target Investing. “This hampers the cash-flow generation ability of companies as it will be difficult to sharply raise tariffs”
Sixteen of the 19 sector indexes compiled by BSE Ltd. fell, led by a gauge of utilitiesHDFC Bank Ltd contributed the most to the Sensex decline, decreasing 1.8% while IndusInd Bank Ltd had the largest drop, falling 4.4%Vodafone Idea tumbled 24% after jumping as much as 21% ahead of a top court’s verdictPage Industries Ltd. declined 4.6% after its third-quarter revenue missed estimates
Inflows From India’s Bond Index Entry Depend on What it SellsVodafone Idea at Risk After India Court Rejects PleaIndia Court Begins Contempt Case on Telcos for Dues Non-Payment
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