rupeedesk.in
Stocks of major steel companies are seen slightly down next week due to sluggish demand for the commodity in the domestic market. Demand for steel usually takes a hit during Jun-Sep as monsoons lead to slowing of industrial activity across the country. This is expected to bring down demand for the alloy in the market, in turn impacting prices. Worries that the weakening trend in the rupee may hurt margins of companies in coming sessions is also another factor that could keep performance of steel companies muted during the week. The Indian steel industry relies on imports to meet its coking coal demand. Coking coal and iron ore are the two key raw materials used by domestic steel companies in steel making. On Wednesday, the rupee breached the 60 per dollar level to a record low of 60.7500, as heavy dollar purchases by oil importers and lack of support from the Reserve Bank of India near the psychologically critical level triggered stop losses of banks. We were also of the view that metal companies lack fresh triggers to allow stocks to move in the positive direction in coming sessions.
Stocks of major steel companies are seen slightly down next week due to sluggish demand for the commodity in the domestic market. Demand for steel usually takes a hit during Jun-Sep as monsoons lead to slowing of industrial activity across the country. This is expected to bring down demand for the alloy in the market, in turn impacting prices. Worries that the weakening trend in the rupee may hurt margins of companies in coming sessions is also another factor that could keep performance of steel companies muted during the week. The Indian steel industry relies on imports to meet its coking coal demand. Coking coal and iron ore are the two key raw materials used by domestic steel companies in steel making. On Wednesday, the rupee breached the 60 per dollar level to a record low of 60.7500, as heavy dollar purchases by oil importers and lack of support from the Reserve Bank of India near the psychologically critical level triggered stop losses of banks. We were also of the view that metal companies lack fresh triggers to allow stocks to move in the positive direction in coming sessions.
