IT may remain under pressure for next 3-6 months; 3 large & midcap cement picks: Siddhartha Khemka

economictimes.indiatimes.com:

Siddhartha Khemka, Head-Retail Research, MOFSL, says on a long-term frame, the order book continues to remain strong, the business model is good but in the near term next one or two more quarters of pain is there to be endured by long-term investors. So, for someone looking from a three-six months’ perspective, IT could continue to remain under pressure.

What is your opinion of the market right now?
Siddhartha Khemka: We continue to remain positive on the overall outlook on the market. We have seen the result season so far being more or less in line to better than expectation, barring some sectors like IT, which has been kind of weak. Consumer was not expected to be very strong, but there was a hope that the commentary would come around the recovery post the monsoon which the IMD has given a forecast of above normal monsoon.

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But some of the larger sectors like banking, auto, cement, capital goods continue to report strong numbers and on the back of that, we believe that the market could continue to see an uptick. What is also happening is that in the broader market, select names or select themes are something that the market is picking up.
For example, on Wednesday, we are seeing a lot of momentum in metals and that is largely due to what is happening globally. The dollar index is at a two-week low and we know that the metal prices have an inverse correlation with the dollar index, so that gives an up leg to the LME prices. We are