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Stocks of major steel companies are seen bearish next week on continued weak fundamentals. Weak domestic steel demand amid high supply may continue to weigh on local steel prices. Demand for steel is also dampened by slowing economic growth. However, the downside in stocks of steel companies is expected to be limited on expectations of not-so-poor Jan-Mar earnings of Tata Steel Ltd, especially after the company announced $1.6 bln consolidated goodwill impairment charge for 2012-13 (Apr-Mar).
Tata Steel is the country's leading primary steel producer and is also the sixth largest producer of the alloy in the world. Worsening macroeconomic environment in Europe and shrinking demand in the continent forced Tata Steel Ltd to take the goodwill impairment hit. Jsw Steel and Tata Steel is scheduled to announce its Jan-Mar earnings on May 23.
