BSE Capital Goods index hits 20-month high

ABB India, Siemens, CG Power GE T&D India were up more than 5% each on BSE.

The S&P BSE Capital Goods index rallied more than 2%, hitting 20-month high, after a strong surge in stocks like ABB India, Siemens, Larsen & Toubro (L&T), CG Power and Industrial Solutions and GE T&D India.

At 2:31 pm; the S&P BSE Capital Goods index, the largest gainer among sectoral indices, was up 2.01% or 354 points at 17,995, as compared to 0.10% rise in the benchmark S&P BSE Sensex. The capital goods index hit an intra-day high of 18,040, its highest level since August 20, 2015.

ABB India has surged 14% to Rs 1,595 in intra-day trade after the company said it has posted a significant year-on-year (y-o-y) increase in orders booked in the first quarter of 2017 (Q1), driven by government initiatives and investments. The stock trading close to its all-time high of Rs 1,670, touched on November 19, 2007 in intra-day trade.

The stock of other capital goods companies such as CG Power and Industrial Solutions (up 9% at Rs 83.40), GE T&D India (9% at Rs 373) and Siemens (7% to Rs 1,447) too have rallied more than 5% each in intra-day trade on BSE.

According to analysts at SBICAP Securities, the present capex cycle will be fuelled by government investment, unlike the previous decade when participation by the private sector had been higher.

The government has cleared the NPA resolution package, and its implementation will be a major positive for future investments. This capex cycle will be led by new/emerging sectors such as railways, metros, renewable, roads and transmission & distribution. Companies with better capabilities across these sectors stand to gain, SBICAP Securities said in recent report.

COMPANY	LATEST	PREV CLOSE	GAIN(%)
A B B	1544.75	1401.75	10.2
CG POWER & INDU.	83.50	76.55	9.1
GE T&D INDIA	361.85	341.15	6.1
SIEMENS	1435.90	1355.65	5.9
RELIANCE DEFENCE	66.75	65.05	2.6
CARBORUNDUM UNI.	299.70	292.35	2.5
LARSEN & TOUBRO	1744.00	1708.65	2.1