www.rupeedesk.in
Most steel stocks next week are seen down tracking the larger market, absence of sectorspecific triggers, and weak demand for steel in overseas markets. However, many investors are still bullish on Tata Steel, which posted significantly better than expected Apr-Jun results this week. Indices are seen extending yesterday's sharp losses with chances of a recovery looking bleak. Investors will be keenly eying any move by the US Federal Reserve to taper stimulus programme.
Most steel stocks next week are seen down tracking the larger market, absence of sectorspecific triggers, and weak demand for steel in overseas markets. However, many investors are still bullish on Tata Steel, which posted significantly better than expected Apr-Jun results this week. Indices are seen extending yesterday's sharp losses with chances of a recovery looking bleak. Investors will be keenly eying any move by the US Federal Reserve to taper stimulus programme.
Fundamentally, the steel sector continues to grapple with low
demand, rise in coking coal prices, and a weak rupee. The sector's stocks are going to
continue declining as they have in the past. Tata Steel had surprised this week by posting a 90%
year-on-year increase in profits due to lower input costs, and cost savings, and an
improved earnings before interest, depreciation, taxes, and amortisation.
Although the market had already factored this, its volume growth
in India and improving outlook in Europe, keep Tata Steel's fundamentals positive. JSW
Steel is seen down, and is not recommended until the market stabilises, adding that until JSW
Steel acquires mines outside Karnataka, their sourcing-of-iron-ore woes will
continue. On Jul 30, Chairman and Managing Director Sajjan Jindal had
announced that iron ore
availability is still a concern for JSW Steel and that they are
looking at strategic partnerships with iron ore mining companies.
