PSU stocks feel poll result heat; Cochin Shipyard, Bharat Dynamics worst hit, fall up to 10%
PSU stocks like Cochin Shipyard and Bharat Dynamics fell by 10% following the BSE PSU index's 4% drop post Lok Sabha election results. Analysts remain positive on PSUs as they see government entities having an advantage.
Cochin Shipyard and witnessed a sharp by 10% to Rs 1,630.55 and Rs 1,293.35 respectively as the fell by 4% soon after opened on Wednesday following the disappointing .The index ended nearly 16% lower on Tuesday as the failed to secure a simple majority on its own and would have to piggyback on allies to form the government. As of 9:45 am today, all the of the index were trading in red.
Other stocks like , , and witnessed a decline of more than 5% while railway stocks like IRCTC, IRCON International and RVNL dipped by 4.7%, 6.2% and 7% respectively.
Shares of NTPC, CONCOR, Hindustan Copper, GIC, Central Bank of India, NMDC, Powergrid, PFC, BEL, PNB, Uco Bank, Union Bank of India, HAL, BHEL and SJVN among others witnessed a greater-than-3% fall on charts.
The Index tumbled nearly 14% on Tuesday amid of the Lok Sabha election votes and ended in deep red.
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Despite the fall, analysts are positive on PSUs as the BJP is set to come back.
Manish Sonthalia, Chief Officer, , expects to do well along with PSUs and industrials. “BFSI has led the earnings growth and has seen a correction in valuation. Investment-related themes will come into play with power capex building up in the next 3 to 5 years. We are re-rating as some of the government entities will have an advantage in sectors such as defence, oil marketing companies and power financers,” said Sonthalia.
Chief Investment Officer (CIO) feels Modi coming back at the helm could mean endorsements of his previous government’s policies, which means that infra, manufacturing and PSU as a theme will continue.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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