Why Chemical Stocks Dropped Today – Explained

According to stock market experts, this fall in chemical stocks is due to the discussion of weak results of the coming second quarter of chemical companies. The market is expecting weak quarterly results from chemical companies after Naveen Fluorine International’s weak Q2FY22 numbers, he added.

Deepak speaking on the reason for the recent crash in chemical stocks like Nitrite, Naveen Fluorine, etc.; Avinash Gorakshakar, Head of Research, Profitmart Securities said, “The weakness in chemical stocks is on account of weak quarterly results announced by some chemical companies in the past few days. The market was expecting strong Q2 results from Naveen Fluorine while the company reported Weak Q2FY22 numbers. This has led to speculation that chemical companies will have weak Q2 results and hence chemical stock holders are selling their stake in bulk.”

Echoing the thoughts of Avinash Gorakshakar; Ravi Singhal, Vice Chairman, GCL Securities said, “The market is witnessing profit-booking in areas which were buzzing in the recent trading sessions. Chemical stocks are one of them and most of its stocks were in overbought position where the margin of safety has gone. So, a single negative news was enough for a huge crash in such stocks. Hence, investors are booking profits before the announcement of its results in chemical stocks, especially after the weak results of Naveen Fluorine.”

However, Ravi Singhal of GCL Securities advised investors to take advantage of this selloff and buy Deepak Nitrite shares at close range. ₹on six month target for 2600 ₹from 2800 ₹maintain stop loss at 2900 ₹2544 per share level.

Disclaimer: The views and recommendations given above are those of individual analysts or broking companies and not of Mint.