Capital Goods Stocks Outlook for the Week – 06 to
10.04.2015
( www.rupeedesk.in )
Stocks of most capital goods companies are seen extending gains
next week and are likely to be range bound with a positive bias as the pick up
in order inflows from government agencies in last week of March is likely to
have some spillover.
Capital goods stocks are seen doing well next week, BHEL (Bharat
Heavy Electricals) can
specifically see a correction and bounce back.
The last week of March saw many defence, railways and
infrastructure contracts being awarded as government agencies were keen to meet
their tendering projects. Many companies reported order wins last week. With
the signs of spur in domestic order inflow, the sentiment is very positive around
capital goods stocks.
Power equipment maker ABB and sector bellwether Larsen &
Toubro are seen leading the capital goods rally next week. Overall the sector
is likely to remain on highs next week.
However, the monetary policy mid week will be a key trigger that
will set the tone for the rest of the week. Both capital goods as well as
infrastructure companies are waiting for further relief in terms of interest
rates. Any further downward reduction in RBI repo rates will be a welcome
change, while a status quo is likely to drag down these sectors along with the
wider market.
