AC, power utility stocks surge today: What's the reason?
What's the story
Shares of air-conditioning (AC) and power utility companies witnessed a significant rise today. The surge comes after the India Meteorological Department (IMD) predicted a sharp increase in temperatures across large parts of the country. The forecast has raised expectations of increased summer demand for cooling products as well as services.
Market response
Surge in AC-related stocks
The forecasted rise in temperatures has led to a surge in AC-related stocks. Voltas's shares rose by 2.9% to ₹1,354.30, while Blue Star Ltd gained 1.6% to ₹1,716.30 during today's afternoon session. Newly listed LG Electronics India Ltd also witnessed a jump of 1.8% at ₹1,504.50 on the same day, reflecting investor confidence in the cooling industry's growth potential amid rising temperatures across India.
Temperature forecast
IMD warns of heatwave conditions in several states
The IMD has warned of a steady rise in temperatures across large parts of India. Northwest India is likely to witness a sharp increase in maximum temperatures, while central and eastern regions may see a gradual rise over the coming days. Many states including Gujarat, Maharashtra, Odisha, and Andhra Pradesh are tipped to experience hot and humid conditions, with heatwave alerts issued for pockets of central and eastern India.
Response
Power utility stocks gain momentum
The forecasted rise in temperatures has also led to a surge in power utility stocks. NTPC's shares rose by 1.5% while Adani Power Ltd, Tata Power Ltd and JSW Energy Ltd gained between 3.5% and 3.6%. NHPC Ltd's shares also witnessed an increase of 0.6%, reflecting investor confidence in the power sector amid rising electricity demand during peak summer months.