Capital Goods Stocks Outlook for the week – 07 to 11.09.2015
Stocks
of most capital goods companies are seen extending losses next week tracking
the broader
market,
and even sector heavyweights such as Larsen & Toubro and Bharat Heavy
Engineering are likely to test their support Levels. However, towards the end
of the week there are possibilities of some consolidation in stock of L&T.
The
already weak private sector investment in capital expenditure is expected to
slow down further as both global and domestic macro-economic indicators are
showing no significant sign of recovery.
On
Wednesday, International Monetary Fund's Director Christine Lagarde has said
that near-term downside risks for emerging economies have increased. On the
home front, while these comments are having an impact on the new investment
sentiment, the revival of projects that have been stalled for over three years
is also likely to take a hit.
Whilst
indications of movement in stalled projects towards either revival or
abandonment is
seemingly
a positive sign, we highlight that projects considered revived are still
riddled with issues and are likely to witness slow execution.