Weekly Sector Outlook

Bank Stock Outlook

1. Bank shares are likely to ease further next week as concerns over global economic situation may continue to weigh on the broad market, especially the financial sector, analysts said.
2. Lack of clarity on whether the RBI will continue its monetary policy tightening cycle or take a pause will also cast a shadow over bank stocks.
3. “There is some hope that there could be a short-term recovery in the coming one to two weeks in some bank stocks. Fundamentally, strong stocks like Bank of Baroda & HDFC Bank seeing selling could indicate a near-term bottom in these stocks,” an analyst said.

Auto Stock Outlook

1. Bias for automobile stocks will remain negative next week as volatile domestic and global socio-economic factors are likely to weaken the broader market.
2. Another analyst, however, said the benchmark BSE Auto index is likely to continue outperforming the broader market on good monsoon rains.
3. Good rains help jack up rural incomes, which in turn boost sales of two-wheelers, tractors, utility vehicles and cars.

Pharma Stock Outlook

1. Pharmaceutical counters are seen following broad market sentiment next week, and will take cues from US Federal Reserve Chairman Ben Bernanke’s speech later today, an analyst said.
2. Shares of Dr Reddy’s Laboratories Ltd, Sun Pharmaceutical Industries Ltd & Lupin Ltd., which have considerable presence in the US, are also likely to be impacted as global markets continue to struggle.

Telecom Stock Outlook

1. Shares of telecom service providers are seen trading with a positive bias next week with the exception of Reliance Communications Ltd., dealers said.
2. Dealers, however, warn that if the broader market slides more-than-expected telecom stocks too will come under pressure.

Capital Good Stock Outlook

1. Shares of major capital goods companies are seen tracking the broad market next week on lack of sector-specific triggers, dealers and analysts said.
2. The slow down in the new order inflows is seen dragging sentiment for the capital goods sector, analysts said.

Cement Stock Outlook

1. Shares of major cement companies are likely to track the broad market in the first half of next week, and later take cues from the current month’s despatches data that will be detailed on Thursday, dealers and analysts said.
2. CRISIL Research expects the cement maker’s profitability to decline to the lowest level in the past 10 years during 2012-13 (Apr-Jun).

Steel Stock Outlook

1. The Shares of major steel manufacturers may extend fall next week on concerns that demand is unlikely to pick-up due to slower industrial activity locally and overseas, dealers and analysts said.
2. However, brokerage CLSA has a word of caution as corporate earnings may get downgraded further during the current financial year.

IT Stock Outlook

1. Shares of information technology companies may continue to lag next week due to fears of slowdown in the US economy, the biggest market for Indian software companies, dealers and analysts said.
2. Early this week, IT stocks had recovered somewhat but could not sustain gains as investors sold at every rise amid weak outlook for the sector.

Oil Stock Outlook

1. Shares of state-owned oil companies may come under pressure next week as crude oil prices have remained sticky at current levels and even regained some lost ground this week.
2. Although the crisis in Libya seems to be nearing an end, there is uncertainty over the supply of crude oil from that country.

FMCG Stock Outlook

1. Shares of major fast moving consumer goods companies are seen outperforming the broad market next week as investor confidence in the category continues in the face of a weakening broad market, analysts said.
2. Demand for fast moving consumer goods is expected to be steady across the country as rural and urban incomes rise and demand for products in categories like health and hygiene increases.