BHEL, ABB, L&T plunge to 14% after report says government may scrap restrictions on Chinese companies

Shares of Bharat Heavy Electricals (BHEL) and other capital goods names fell as much as 14% on Thursday after a media report said the finance ministry plans to scrap five-year-old restrictions on Chinese companies bidding for government contracts. Reuters reported, citing two sources, that the move could come as the government seeks to revive commercial ties with the dragon nation amid reduced diplomatic and border tensions.State-owned Bharat Heavy Electricals (BHEL) fell 14% and was the biggest loser in the pack, hitting the day’s low of Rs 261 on the NSE. BHEL shares finally closed at Rs 276.90, up from the day’s low of 261.50, but still closed almost 9% lower. This was the biggest single-day drop that BHEL shares have seen since June 4, 2024, when the stock had fallen 21%. On this day, the Lok Sabha election results were announced.

ABB India closed 5% lower at Rs 5,036, while Siemens ended 4.3% lower at 3,000. Shares of Larsen & Toubro (L&T) settled down 2.7% on the NSE.

Despite today’s decline, BHEL shares have outperformed the benchmarks Nifty and Sensex, returning 20% ​​over a one-year period. The returns of Nifty and Sensex in the same period are 9% and 8% respectively.

The overall tone of the market was negative with Nifty ending down 1% at 25,876.85, down 263.90 points, while Sensex fell 780 points to settle at 84,180.96.

Selling pressure was seen across the board, but was more prominent in the IT, metals, pharmaceuticals and PSU banking sectors. While Nifty PSU Bank fell 3.4%, Nifty IT and Nifty PSU Bank fell 2% each. Nifty Pharma fell 1.4%.

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