Capital Goods Stocks
Outlook for the week – 27.06.2016 to 01.07.2016, Seen in range with negative
bias
Stocks of capital goods companies are expected to trade in a
range with a negative bias next week,
tracking the broad market for further cues in the aftermath
of the Brexit that sent markets worldwide
in a tailspin yesterday. Indian financial markets reacted
sharply to the surprise result of the UK
referendum, with the BSE Sensex falling over 1000 points, or
4%, and rupee declining to 68.21 a
dollar, the lowest level in four months.
Nifty 50 ended down 181.85 points or 2.2% at 8088.60, after
touching an intraday low of 7927.05
points. Stocks of major capital goods companies were down
after the UK voted in favour of leaving
the European Union, as traders pulled funds out of equities,
owing to uncertainty across the wider
market. While capital goods and engineering sectors are
largely a domestic story, the tone for the
broad market will be dictated by foreign institutional
flows. If investment sentiment remains subdued
across the wider market, stocks in this sector will feel the
headwinds as well. Avantha Group-owned
Crompton Greaves, too, fell 1.5% following the referendum,
while stocks of state-owned Bharat
Heavy Electricals and Siemens were down 3.3% and 2.2%,
respectively. Stock of Siemens is seen
trading with a weak bias.