Capital Goods Stocks Outlook for the week – 04 to 08.04.2016
RBI
policy Tue to dictate trajectory
( www.rupeedesk.in )
The
Reserve Bank of India's first bi-monthly monetary policy for 2016-17 (Apr-Mar)
to be announced on Tuesday is likely to dictate movement of capital goods
stocks next week. Most market participants are hoping for a 25-basis-point repo
rate cut by the RBI. Although this has largely been factored in, the announcement
is likely boost the sentiment and lead to some gains for indices.
In
case the central bank keeps rates unchanged, it will impact capital goods
stocks negatively. Ahead
of
the policy announcement, the stocks are seen getting a positive push from the
5.7% output growth
in
core sectors in February, data for which was released on Thursday.
Among
the stocks, technical analysts' favoured are Larsen and Toubro Ltd and Siemens
Ltd. One can
go long on these stocks. Larsen & Toubro has announced orders worth
163.4 bln rupees in Jan-Mar till date. The company has given a guidance of 5-7%
on-year growth in order inflow, and has garnered 935.2-bln-rupee order inflows
in Apr-Dec. State-owned Bharat Heavy Electricals Ltd's stock may move in
anticipation of the Jan-Mar results, which will be announced on Thursday.