Would be underweight on commodities: Sandip Sabharwal, Prabhudas Lilladher

Sandip Sabharwal, CEO - PMS, Prabhudas Lilladher, in a chat with ET Now talks about the metal space

Would you look at some of the mid-cap metal stocks, particularly the steel stocks?

In the metal space, there are not so many mid-cap companies per se. If you look at the steel segment, most of the companies tend to be large companies because of the capacities involved. So this M&A activity could be a one off one and overall steel as a sector will face a lot of headwinds in the year 2011 as China tightens its monetary policy. China has been a driver of steel prices overall globally, so there is not one segment.

Commodities overall as a segment could be one where I would personally be underweight for the next year as the Chinese will have to come down hard to control the inflation and as that happens, we could see some of these commodities sell off very sharply. So I would not be looking at this segment too much.