Chemical stocks may underperform; brokerages stay cautious on sector

Since their highs in September, chemical stocks have underperformed the benchmarks and broader indices over the past month with larger players witnessing a 9-22 per cent fall during this period. Expectations of weak September quarter results amid high inventory, demand woes and weak realisations have led to the underperformance.
 

The rally in chemical prices over the last month and a half has, however, boosted sentiment for companies in the sector. 

Brokerages, however, have a mixed outlook on the sustainability of the pricing improvement and are by and large cautious on the sector. They either recommend players higher up the value chain