www.rupeedesk.in
Stocks of most capital goods and engineering companies are seen down next weak amid
fears that political instability could freeze government spending, but sector heavyweight
Larsen & Toubro could gain on value buying. Stock of L&T could rise next week as it is
currently trading at an attractive valuation.
On Tuesday, the Dravida Munnetra Kazhagam, the second largest party in the ruling
United Progressive Alliance, pulled out of the coalition to protest the government's stand
on the issue of Sri Lankan Tamils. On the same day, the Reserve Bank of India
announced a repo rate cut of 25 basis points but hinted that it might not cut policy rates
further unless inflation shows strong signs of cooling. Together these two announcements
have negatively affected the capital goods sector, which was hoping for an economic
boost in the last quarter of 2012-13 (Apr-Mar).
