Budget sops power capital goods index

The BSE Capital Goods index on Thursday rallied more than 217 points to its lifetime high of 7811.69 in intra-day trades, reflecting the Budget's positive announcements for the sector.

The index closed 1.61 per cent higher, almost 122 points up at 7716.32 compared with the benchmark Sensex, which gained 0.58 per cent to close at 10626.78.

The top index gainers were Eimco Elecon India (9.99 per cent), Alstom Projects (9.63 per cent), Siemens (6.83 per cent), ABG Heavy Industries (5.34 per cent) and Bharat Electronics (3.88 per cent). Substantial volumes were observed in stocks of Alstom Projects, Areva , Larsen & Toubro, Dredging Corporation, Bharat Electronics and Greaves Cotton.

The Budget's thrust on power has brought good news for power utility and capital goods sectors. The government plans to augment capacity in power generation, transmission and distribution.

The proposals for increasing power generation capacity and setting up mega power projects will create derived demand for capital goods.

The government mandate to power 40,000 villages which means huge orders for electrical equipment companies. A reduction in import duty will also act as an incentive to companies.

The stocks which constitute the capital good index witnessed trading volumes of 53 lakh shares. Total traded value touched Rs 414.14 crores. Of the 25 scrips in the index, 16 showed positive movement. Advanced stocks registered trade value of Rs 346.51 crores.