Stocks of most cement companies are seen trading with a positive bias this week. The possible upside for the cement sector this week is 3-5%. While technicals are positive on the sector's stocks, some fundamentals neutral citing lower despatches due to rains and the lack of other driving factors. We are neutral towards the cement sector at this point. The despatches have been impacted by the recent pick-up in the monsoons. Cement prices are expected to remain weak in the near term as construction activity has slowed on account of the monsoon rains. However, prices are expected to rise after the end of monsoon. The price of cement declined by 12-15 rupees a bag in August in most parts of the country on account of the rains. The four-month monsoon season began on a weak note in June, but picked strength last month. The all-India rainfall was 100% of the long-period average in August.
