Capital Goods Stocks Outlook - 12 to 16.12.2016
Capital Goods Stocks Outlook - 12 to 16.12.2016
( www.rupeedesk.in )
The shares of capital goods companies are expected to witness further correction next week, amid an overall
dull outlook for the sector, and as data released today showed a sharp contraction in the segment's output.
Output of capital goods, a proxy for investment demand in the economy, contracted for the twelfth straight
month in October, declining 25.9% as against a 21.6% fall a month ago, according to data released by the
Central Statistics Office.
The sector's growth was 16.5% in the corresponding month a year ago. Crompton Greaves would be in focus
next week as the stock hit a six-month low of 60.20 rupees on Thursday, after it terminated a deal to sell its
overseas transmission and distribution business to US private equity fund First Reserve International.
The stock could see a downside in the next seven days, finding support at 60 rupees. In case it rises, resistance
would be at 75 rupees. Earlier in the week, the company's Jul-Sep consolidated net profit from continuing
operations nearly halved to 268.3 mln rupees from 497.0 mln rupees a year ago. Sector bellwether Larsen &
Toubro is likely to trade in a narrow range in the near-term in the absence of major business activity.
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Capital Goods Stocks Outlook - 12 to 16.12.2016
