GOLDEN RULES FOR TRADING

Capital Goods Stocks Outlook for the week – 28.09.2015 to 01.10.2015 Seen in range, with negative bias

Capital Goods Stocks Outlook for the week – 28.09.2015 to 01.10.2015
Seen in range, with negative bias

Stocks of most capital goods companies are seen trading in a range with a negative bias next week in the absence of any positive sector-linked development and weak investor sentiment in the broader market due to global uncertainties.

However, stocks of these companies may see some limited upside if the Reserve Bank of India announces a rate cut during its fourth bi-monthly monetary policy of 2015-16 on Tuesday.

The next week will also see the commerce and industry ministry announcing the core sector growth data for August. As companies operating in core business areas are major clients for capital goods companies, weak data for August may impact the shares of companies in the sector. Growth in key core industries fell to 1.1% in July from 3.0% a month ago.

Stocks of Bharat Heavy Engineering, Thermax and sector heavyweight Larsen & Toubro are seen extending losses next week while those of Siemens and KEC are seen in range with marginal upside.

Order inflows from power transmission and distribution companies are seen picking up since the last few months and this bodes well for Kalpataru Power Transmission, KEC International, Siemens, Alstom India and Alstom T&D India.