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Steel stocks are seen trading rangebound next weak in the absence of any major triggers, with our positive view on stocks of JSW Steel. This week, the Nifty gained 3% to close at 5850.6 yesterday, while the BSE Sensex ended up 2.4% at 19732.76. The CNX Metal Index ended up 4.1% at 2101.7. Yesterday, JSW Steel reported it produced 985,000 tn crude steel in August, down 1.5% from 1 mln tn last year. Despite the fall in output, we are positive on the stock as the figures were lower due to a maintenance shutdown at the company's plant, which was expected. Tata Steel shares will be under pressure next week as they may see a lot of short-term profit booking. In the near term, lower realizations, negative news flow from the Central Bureau of Investigation case and uncertainty over Shah Panel recommendations (especially for Sarda iron ore mines) will weigh on sentiment on Jindal Steel and Power. We believe the Street is wrongly extrapolating concerns over an investigation into one coal mine to all operating coal mines. Signing of Utkal B1 coal block mining lease could act as a nearterm positive trigger. No major movement is expected for Steel Authority of India stock
next week.
Steel stocks are seen trading rangebound next weak in the absence of any major triggers, with our positive view on stocks of JSW Steel. This week, the Nifty gained 3% to close at 5850.6 yesterday, while the BSE Sensex ended up 2.4% at 19732.76. The CNX Metal Index ended up 4.1% at 2101.7. Yesterday, JSW Steel reported it produced 985,000 tn crude steel in August, down 1.5% from 1 mln tn last year. Despite the fall in output, we are positive on the stock as the figures were lower due to a maintenance shutdown at the company's plant, which was expected. Tata Steel shares will be under pressure next week as they may see a lot of short-term profit booking. In the near term, lower realizations, negative news flow from the Central Bureau of Investigation case and uncertainty over Shah Panel recommendations (especially for Sarda iron ore mines) will weigh on sentiment on Jindal Steel and Power. We believe the Street is wrongly extrapolating concerns over an investigation into one coal mine to all operating coal mines. Signing of Utkal B1 coal block mining lease could act as a nearterm positive trigger. No major movement is expected for Steel Authority of India stock
next week.
