Capital Goods Stocks Plunge 12% on Report of Eased China Curbs

• Shares of BHEL, ABB India Ltd., Siemens India Ltd., and Larsen & Toubro Ltd. (L&T) fell up to 12% on Thursday, January 8.
• BHEL experienced its biggest single-day drop since June 4, 2024, the day of the Lok Sabha election results.
• The decline was triggered by a Reuters report stating India's Finance Ministry plans to scrap restrictions on Chinese firms bidding for government contracts.
• These curbs, imposed in 2020 after the Galwan border clash, required political and security clearance for Chinese bidders.
• Easing restrictions could help India raise its thermal power capacity; a high-level committee also recommended this.

Why It Matters: Reported easing of Chinese firm restrictions triggered a sharp fall in Indian capital goods stocks.