Capital goods shares tumble after weak IIP data

Fourteen capital goods shares fell by 0.08% to 2.17% at 9:54 IST on BSE after weak industrial production data in October 2013.

Bhel (down 2.17%), Crompton Greaves (down 1.4%), Larsen & Toubro (down 1.29%), ABB India (down 1.11%), Siemens (down 1.02%), ALSTOM India (down 1.02%), Thermax (down 1%), Lakshmi Machine Works (down 0.98%), Punj Lloyd (down 0.9%), BEML (down 0.87%), SKF India (down 0.83%), Havells India (down 0.3%), AIA Engineering (down 0.2%) and Bharat Electronics (down 0.08%), edged lower.

The S&P BSE Capital Goods index was down 1.37% at 9,901.68. It underperformed the S&P BSE Sensex, which was down 0.50% at 20,820.86.

The S&P BSE Capital Goods index had underperformed the market over the past one month till 12 December 2013, sliding 14.45% compared with the Sensex's 3.17% rise. The index had also underperformed the market in past one quarter, falling 27.71% as against Sensex's 5.78% rise.

Index of industrial production (IIP) declined 1.8% in October 2013, against 2.0% growth in the previous month September 2013. The decline in the output of manufacturing sector at 2.0% and mining sector at 3.5% mainly led to decline in IIP for October 2013. Meanwhile, the marginal 1.3% growth in the electricity generation restricted further dip in industrial production during October 2013.

The IIP growth for the month of September 2013 has been retained unchanged at 2.0%, while the growth for the month of July 2013 has been scaled down to 2.6% from 2.8% reported at first revision. However, the final growth rate for July 2013 is similar to the provisional level of 2.6%. The data was announced after market hours on Thursday, 12 December 2013.

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