Capital Goods Stocks for the week – 05 to 09.12.2016
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Capital Goods Stocks for the week – 05 to 09.12.2016
( www.rupeedesk.in )
The shares of capital goods companies are likely to see a correction next week amid weakness in the broader market. We see large-cap stocks such as Larsen & Toubro and Bharat Heavy Electrical trading in a narrow range, while mid-caps such as Voltas and Cummins India are expected to see some buying momentum, after the recent correction in these stocks. The capital goods companies were also seen consolidating because traders were selling every time the stocks pushed higher. Investors are awaiting further evidence of the sector's strength to be reflected in the Industrial Index of Production, data on which is scheduled to be detailed next week. The outcome of the Monetary Policy Committee's meeting on Dec 6-7 will also act as a trigger for the shares. The below-par growth in India's GDP for Jul-Sep added to a grim outlook for the sector in the wake of a fall in capital expenditure across industries. For Jul-Sep, capital expenditure contracted 5.6% on year, suggesting that the revival in the investment cycle has not yet take off. Mirroring the weakness in investment activity the gross fixed capital formation recorded a year-on-year contraction in Q2 (Jul-Sep) FY2017 (Apr-Mar), in line with de-growth in output of capital goods and the central government's capital expenditure," said Aditi Nayar, principal economist at ICRA. YES Bank expects further delay in private capital expenditure to weigh on demand for capital goods. Despite the grim for demand in the sector, the BSE capital goods index managed to eke out gains of 0.35% this week.
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Capital Goods Stocks for the week – 05 to 09.12.2016
( www.rupeedesk.in )
The shares of capital goods companies are likely to see a correction next week amid weakness in the broader market. We see large-cap stocks such as Larsen & Toubro and Bharat Heavy Electrical trading in a narrow range, while mid-caps such as Voltas and Cummins India are expected to see some buying momentum, after the recent correction in these stocks. The capital goods companies were also seen consolidating because traders were selling every time the stocks pushed higher. Investors are awaiting further evidence of the sector's strength to be reflected in the Industrial Index of Production, data on which is scheduled to be detailed next week. The outcome of the Monetary Policy Committee's meeting on Dec 6-7 will also act as a trigger for the shares. The below-par growth in India's GDP for Jul-Sep added to a grim outlook for the sector in the wake of a fall in capital expenditure across industries. For Jul-Sep, capital expenditure contracted 5.6% on year, suggesting that the revival in the investment cycle has not yet take off. Mirroring the weakness in investment activity the gross fixed capital formation recorded a year-on-year contraction in Q2 (Jul-Sep) FY2017 (Apr-Mar), in line with de-growth in output of capital goods and the central government's capital expenditure," said Aditi Nayar, principal economist at ICRA. YES Bank expects further delay in private capital expenditure to weigh on demand for capital goods. Despite the grim for demand in the sector, the BSE capital goods index managed to eke out gains of 0.35% this week.
