CAPITAL GOODS STOCKS OUTLOOK FOR THE WEEK – 15 TO 19.09.2014
( www.rupeedesk.in )
Stocks of most capital goods companies are seen moving in a narrow range with a
negative bias next week following weak industrial growth numbers for July, where were
released post market hours yesterday.
India's industrial growth fell to a four-month low of 0.5% in July from 3.9% a month ago,
mainly on account of the statistical effect of a high base and a contraction in
manufacturing and the consumer durables sector.
The manufacturing sector, which accounts for nearly three-fourths of the total weight of
the Index of Industrial Production, contracted 1.0% in July, compared with growth of
2.5% a month ago while capital goods sector growth contracted 3.8% in July against
growth of 15.98% year ago.
However, long-term investors may return to the sector taking advantage of the drop in
prices and driven by optimism of seeing a turnaround in the sector October onwards. We
opine that the companies having international exposure could benefit and outperform the
purely domestic-focused companies till significant improvement in domestic business
environment is observed.
( www.rupeedesk.in )
Stocks of most capital goods companies are seen moving in a narrow range with a
negative bias next week following weak industrial growth numbers for July, where were
released post market hours yesterday.
India's industrial growth fell to a four-month low of 0.5% in July from 3.9% a month ago,
mainly on account of the statistical effect of a high base and a contraction in
manufacturing and the consumer durables sector.
The manufacturing sector, which accounts for nearly three-fourths of the total weight of
the Index of Industrial Production, contracted 1.0% in July, compared with growth of
2.5% a month ago while capital goods sector growth contracted 3.8% in July against
growth of 15.98% year ago.
However, long-term investors may return to the sector taking advantage of the drop in
prices and driven by optimism of seeing a turnaround in the sector October onwards. We
opine that the companies having international exposure could benefit and outperform the
purely domestic-focused companies till significant improvement in domestic business
environment is observed.
