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Sluggish domestic demand and weak prices globally are seen weighing on the stocks of frontline steel companies next week. The market will also keep tracking the Reserve Bank of India's review of the monetary policy, due on Tuesday, and Apr-Jun earnings. However, the negative momentum for the metal is quite strong. The coming week is likely to follow the falling trend as there is no positive signal for the sector adding that a major reversal is unlikely. All these stocks are breaking their major support level, especially Tata Steel Ltd and JSW Steel Ltd. They have fallen more than 50% since January.
The slow economic growth has hit the automobile and infrastructure sectors, which are major consumers of the alloy, leading to sluggish demand. The Society of Indian Automobile Manufacturers had at the beginning of the current financial year projected a 6-8% sales growth for the sector. However, total sales during Apr-Jun were 2.1% lower on year. The second quarter value growth for the auto sector is to remain subdued. Global factors have also played a significant role in underperformance of stocks because of weakness in prices internationally. The outlook remains negative. Sales in the steel sector have been very poor because of abundant supply and lesser demand worldwide, especially from the emerging economies that are facing slower growth.
Sluggish domestic demand and weak prices globally are seen weighing on the stocks of frontline steel companies next week. The market will also keep tracking the Reserve Bank of India's review of the monetary policy, due on Tuesday, and Apr-Jun earnings. However, the negative momentum for the metal is quite strong. The coming week is likely to follow the falling trend as there is no positive signal for the sector adding that a major reversal is unlikely. All these stocks are breaking their major support level, especially Tata Steel Ltd and JSW Steel Ltd. They have fallen more than 50% since January.
The slow economic growth has hit the automobile and infrastructure sectors, which are major consumers of the alloy, leading to sluggish demand. The Society of Indian Automobile Manufacturers had at the beginning of the current financial year projected a 6-8% sales growth for the sector. However, total sales during Apr-Jun were 2.1% lower on year. The second quarter value growth for the auto sector is to remain subdued. Global factors have also played a significant role in underperformance of stocks because of weakness in prices internationally. The outlook remains negative. Sales in the steel sector have been very poor because of abundant supply and lesser demand worldwide, especially from the emerging economies that are facing slower growth.
