Cement Stocks Outlook for the week (04.06.2012 - 08.06.2012)
Stocks of major cement companies are seen rangebound next week amid lack of sector-specific triggers. However, the bias is likely to be negative on low demand outlook as the sector enters a seasonally weak period. Demand for cement typically dries by mid-June, as construction activity slows down during monsoon. The sector looks very dormant in coming sessions and will largely take cues from the market. There seem to be no independent factors (from the cement sector) that will govern (the stocks of the) cement companies. Domestic cement prices declined 2% across country during May 16-30, the third consecutive fortnightly fall in prices, mainly due to low demand. Imports of cheaper cement from Pakistan has added to the woes of the domestic cement makers. Demand for cement is seen dull from hereon as buyers will defer their purchases in anticipation of price cuts by cement companies ahead of monsoon. Also, ss of cement makers are likely to remain under pressure on expectation that the Competition Commission of India, which is investigating allegations of price rigging by companies, may announce its order soon.
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