Dipan Mehta, Member, BSE, expects cement stocks to get attractive, but is apprehensive on metal stocks.

Excerpts:

Do you think we are trending lower from here?

Mehta: No, I think for the time being, the markets have again got back to a trading range … even 4700 may prove to be a support, but 4900 may turn out to be a stiff resistance as far as the Nifty is concerned. By and large, the markets appearing to be settling down.

What do you make of the NTPC FPO? Did it just sum up the mood of the markets?

Mehta: The timing was unfortunate. Suddenly, FII appetite for Indian equity has disappeared and that is why domestic institutions are stepping in. But it did appear that the follow-up offer had good appetite from foreign institutional investors. But it was the timing. One should extrapolate the situation in NTPC to some of the other IPOs or even the other government investment target, because the story could be vastly different. Remember, even in the secondary market,  NTPC is broadly on the expensive side, given the kind of controls which the government have.

What’s your call on the metals and cement space?

Mehta: I think, at the lower levels, cement may turn out to be attractive, given the kind of volume growth which the industry has delivered. Performance for the third quarter was also quite impressive from most cement companies. But metals, both ferrous and non-ferrous, are a bit apprehensive at this point of time. The basic engine for this particular industry seems to be slowing down. One is of course China, and efforts are being made by the government to cool of the economy. Globally, the general consensus is that the GDP growth is going to be slower than expected. That is also going to affect demand, and, most importantly, the US dollar has also started strengthening. There was a big trigger for commodities, but not so any more. So, I think the picture is a bit murky for all commodities.