India, like any other emerging market country was hit hard by COVID-19.This morning, the largest indian company by value, Reliance Industries’ shares (RELI.NS) dropped -2.6%, driven by reports of a 44% loss in the second quarter of 2020. But, sentiment remains positive across the wider Indian Technology stock markets as India’s IT index – Nifty IT (NIFTYIT) is up +2.22% week-to-date (WTD) and trading at its all time high.
Ran by Mukesh Ambani, reliance industries has become India’s biggest conglomerate, involved in industries such as petroleum, petrochemicals, textile, telecommunications and media. The decline in operational revenue was mostly because of a hit to its petroleum business due to the pandemic. Despite the loss Reliance has performed to expectations, the stock has been trending upwards for the past couple of months thus it remains rated as a buy by stock analysts. Investor profit-taking and the recently announced weak unnerving GDP data also contribute to the dip.
Recently, Investors have been flocking to India’s IT and telecommunications sectors. Their signal comes from news that Google and Jio (Reliance Industries’ Telecoms arm) are partnering up on a venture to bring google’s range of product to the Indian market. Google is seeking to invest $10 billion in the development of software for the next generation smartphones. Along with the ban of Chinese providers of 4G and 5G in India – local telecommunications companies now have a greater chance to compete in the market and have thus, turned into attractive investment opportunities.