Why capital goods stocks are rising despite weakness in stock market — explained
Stock market today: Despite weak stock market sentiments, capital goods shares have managed to deliver strong upside movement in last few sessions. BSE Capital Goods Index has been in continuous upside trend and Indian stock market experts are expecting further upside in the index. They said that after the strong L&T results for Q1FY24, market mood has gone upbeat on the segment as Dalal Street observers believe that capital goods companies are sitting on record order book and this would help them improve their Capex in upcoming quarters as well.
They said that despite weakness in Indian stock market, investors are betting behind capital goods shares as they are looking safe in current scenario. On why capital goods shares are surging despite weakness in Dalal Street sentiments, Avinash Gorakshkar, Head of Research at Profitmart Securities said. “After strong Q1 results 2023 by L&T, market has gone highly bullish on capital goods segment as majority of the quality companies in this segment is sitting on record order book.
This is expected to enable these companies to improve their capex in upcoming quarters." Profitmart Securities expert went on to add that quality capital goods shares are looking safe bet in current weak market sentiments. Market is expecting that capital goods share may outperform other segments after the trend reversal on Dalal Street. "The BSE Capital Goods Index has made strong base at 42,400 to 42,500 levels.
The index is looking in bull trend on chart pattern and it may go up to 44,500 to 45,000 levels in near term. On capital goods stocks that one can look at both experts suggested positional investors to look at L&T, BHEL, Cummins, HAL and BEL. Disclaimer: The views and recommendations made
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