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Informist, Friday, Jun. 12, 2026

 

MUMBAI – Shares of capital goods companies are likely to gain if the US President Donald Trump follows through on his announcement with a final agreement to end the war with Iran, analysts said. Trump Thursday said both countries are close to reaching an agreement, while Iran said a 14-point plan is being considered, but "nothing has been finalised".

 

While doubts over the final agreement remain, Brent crude oil futures have fallen sharply below $90 per barrel on hopes of a deal. This is positive for capital goods companies, which are facing margin risk due to high crude oil prices. At 1755 IST, Brent crude oil August futures traded at $87.77 per barrel.

 

Shares of Larsen & Toubro, which gets a major chunk of business from West Asia, jumped over 5% intraday after Trump's latest comments. The stock ended the session at INR 4,049.30 on the National Stock Exchange, up 4.9% from Thursday. "The capital goods leader with operations in West Asia stands to gain hugely from peace in the region," said VK Vijayakumar, chief investment strategist at Geojit Investments Ltd., in a note.

 

While crude oil prices have come down, capital goods companies' margins for the June quarter are still expected to be hit, as oil prices have been high for most of the quarter. Further, high oil prices have already led to higher commodity prices, such as steel, rubber, and plastic, and could hit margins going forward.

 

The BSE Capital Goods index has performed exceedingly well in the past three months despite the US-Iran war. The sectoral index is up nearly 12% since the war started as compared with more than a 7?ll in the Sensex during the same period.

 

The sharp rise in the capital goods index has been driven by hopes of strong demand from transmission and distribution, transformers, and data centre sectors. However, high valuations of these stocks could limit returns in future, analysts said. "Strong cycle but weaker risk-reward," Nuvama Institutional Equities said in a report on the capital goods sector on Monday, while pointing to high valuation across the sector.

 

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The following are the resistance and support levels for key capital goods stocks for next week as per calculations based on their prices on the National Stock Exchange:

 

Company	Price	Week-on-week change in %	Resistance	Support
Bharat Heavy Electricals	378.75	(-)2.10	386.70	365.80
CG Power and Industrial Solutions	914.45	(-)2.50	931.80	888.80
Larsen & Toubro	4,049.30	2.40	4,148.80	3,871.20
Siemens	3,569.60	(-)3.60	3,644.10	3,480.70
Thermax	4,726.30	(-)2.20	4,820.20	4,579.60
Bharat Electronics	406.50	(-)0.40	412.00	400.60
Index	Levels
S&P BSE Capital Goods	78891.93	(-)1.40	79693.30	77503.70
Nifty 50	23622.90	1.10	23858.80	23195.90
S&P BSE Sensex	75527.95	1.70	76351.10	74041.80

 

End

 

Reported by Anshul Choudhary

Edited by Saji George Titus

 

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