BHEL and capital goods on the rise

BHEL is doing well today, opening Rs.2 higher and going on to hit an intra day high at Rs.275.75, up almost 3%. Other capital goods stocks like Thermax, ABB, BEML, Crompton Greaves and L&T are all in the green.

This sudden liking for capital good stocks is optimism rising from the latest HSBC Manufacturing PMI for December which showed that India had expanded at its fastest pace since 2012-13 with new orders coming in while factories did not indulge much in price hikes.

The HSBC Manufacturing Purchasing Managers' Index (PMI), compiled by Markit, rose to 54.5 in December from 53.3, its highest since end-2012 and its 14th straight month above the 50-mark which is the benchmark – above 50 its good and below 50 it means growth is slipping