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Capital Goods Stocks Outlook for the week – 05 to 09.01.2015
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( www.rupeedesk.in )
Stock indices are expected to trade with a positive bias next week with market participants pinning hopes for some concrete announcements from the two-day banking conclave called 'Gyan Sangam' that concludes on Saturday. On hope of stronger reforms from the government, especially the banking space, key indices rose by more than 1% yesterday to close at a near onemonth high.
Markets are eyeing three major topics in Gyan Sangam; first is stressed asset quality in PSBs which is as high as 12% of total loans and capital requirements of banks to fulfil Basel III requirements. Second is discussion on M&A activity in banks and management restructuring in PSBs. Third and most important, rate cut by RBI this year, markets expect dovish tone from the RBI governor on rate cut and inflation trajectory.
The bigger trigger for the markets next week will be corporate earnings which will kick-start with Infosys on Friday. With the bias being positive, market participants expect National Stock Exchange's Nifty to make a decisive move above 8400 points next week.
Banks are expected to gain further next week, but much of it will hinge on the outcome of the conclave over the weekend. Automobile stocks may remain subdued after the weak sales data posted by the companies for December. Investors will now wait to see if companies will raise product prices to pass on the excise duty hike.
Among specific stocks, Fedders Lloyd may rise on Monday as the company has bagged an order worth 1.07 bln rupees from Orissa Power Transmission Corp.
( www.rupeedesk.in )
( www.rupeedesk.in )