Capital goods stocks gain on hopes of higher customs on power equipment
The BSE Capital Goods index rises 1% compared to a 0.4% fall in the Sensex
Shares of capital goods companies are in focus in an otherwise subdued market in morning trades on reports that the government will impose a 5% import duty on power generation equipment.
“The Prime Minister's Office (PMO) on Wednesday directed the power ministry to float a fresh proposal on slapping higher duty on imported power gear, a move aimed at cushioning domestic firms including Bharat Heavy Electricals Ltd (BHEL) and Larsen and Toubro Ltd (L&T) against cheap imports, mainly from China,” the report suggests.
Currently, equipment imported for projects of less than 1,000 MW capacity attract 5% customs duty while those above that are exempt.
The Bombay Stock Exchange (BSE), the BSE Capital Goods index, the largest gainer among the sectoral indices, is up 102 points or 1% compared to 64 points or 0.4% fall in the benchmark Sensex at 1023 hours.
Among the individual stocks, L&T, ABB, BHEL, Siemens, Crompton Greaves, Bharat Electronics and Thermax are trading higher by 1-3% on the BSE.