Capital
Goods Stocks Outlook for the week –16 to 20.03.2015
( www.rupeedesk.in )
Stocks of capital goods companies are seen tracking the
wider market next week in absence of sector specific triggers. Share indices
will take cues from the Budget session of the Parliament, the US Federal
Reserve's stance on interest rate hike, and the Wholesale Price Index-based
inflation data for February. The US Federal Open Market Committee, meanwhile,
is scheduled to commence its two-day meeting on Tuesday. The US central bank's
view is of importance as it is likely to impact flows from foreign
institutional investors.
Any likelihood of easing of inflationary pressure could
also increase expectations of a rate cut by the Reserve Bank of India. A rate
cut will bode well for most capital goods and infrastructure companies that
usually tend to have high finance costs. In the medium-to-long term, investors
still remain bullish on sector major Larsen & Toubro. Despite near term
headwinds, we remain positive on L&T - the company has emerged as the
E&C partner of choice and is also exposed to several segments like Defence,
Power BTG (boiler, turbine, generator), etc which provides a robust foundation
to capitalize on the next leg of investment cycle.
Stocks of cooling solution maker Blue Star will also be
in focus next week as the company has approved the sale of its professional
electronics and industrial systems business to its whollyowned subsidiary for
1.1 bln rupees.
