Heatwave Pushes AC, Power Stocks Higher In Early Trade As North India Swelters

Shares of air-conditioner (AC) makers and power companies moved higher on Monday as a heatwave across North India pushed up expectations of cooling demand and electricity use.

In early trade, Blue Star shares rose 3.44% to ₹1,881. On the other hand, Voltas shares gained 2.34% to ₹1,498.20. LG Electronics India advanced 3.30% to ₹1,630.

At 12:21 pm, Blue Star shares were trading at ₹1,893.70 a piece, up by 4.14%. During the same time, Voltas and LG Electronics shares were up by 3.72% and 2.74%, respectively.

Heatwave Alerts Behind The Rally

Market participants feel that the heatwave experienced by several parts of north India, including Delhi, has led to a surge in stock prices of air conditioner manufacturers.

Note that the India Meteorological Department (IMD) in north India has issued a yellow alert for several regions. Temperatures stayed elevated in Delhi and nearby areas. Multiple locations crossed 42°C. The Ridge station recorded around 43.5°C, among the highest readings.

Contract Manufacturers See Buying Interest

Companies linked to the AC supply chain also traded higher. These firms supply components and assemble units for major brands.

At 12:28 pm, Amber Enterprises India and PG Electroplast Ltd shares were up by 5.34% and 3.23%, respectively. The rally came as investors factored in higher order flow from appliance makers during peak summer months.

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Power Stocks Edge Up On Demand Outlook

Power sector stocks also saw gains as higher cooling usage is expected to push electricity demand.

At 12:32 pm, National Thermal Power Corporation (NTPC) and Power Grid Corporation of India shares were trading 2.12% and 1.64% higher, respectively, on the National Stock Exchange (NSE).

Note that IMD has said heatwave conditions are likely to persist across northwest, central and eastern India over the next few days. Regions expected to remain affected include Bihar, Jharkhand, Gangetic West Bengal and Odisha, among others.

The IMD attributed the current conditions to dry northwesterly winds, clear skies and strong solar radiation. Some areas are also seeing warmer nights, offering limited relief.

Sources:

Moneycontrol

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