Metal Stocks Outlook for the week - 19 to 23.May.2014
(www.rupeedesk.in)
(www.rupeedesk.in)
Stocks
of metal companies are seen range bound next week and are expected to
witness
some consolidation after their run-up this week. On indications that the
Bharatiya
Janata Party-led National Democratic Alliance is set to form the next
government
at the Centre, metal stocks had raised 2-12% intraday yesterday
with
Sesa Sterlite as the top gainer on the Nifty. However, Tata Steel's stocks
were
overpowered by negative sentiment due to the Supreme Court's ruling that
26
mines in Odisha, including seven of Tata Steel, with deemed extensions are
to
stop their operations. This caused the stock to end 4.3% lower at 440.90
rupees.
The seven Odisha mines meet 75% of Tata Steel's iron ore
requirements.
Steel
Authority of India owns three of the 26 Odisha mines in focus, but they
account
for roughly 25% of the company's iron ore requirements. So the
company
is not expected to be hit as badly as Tata Steel. On the non-ferrous
front,
US-based Novelis, the wholly-owned subsidiary of Hindalco Industries,
reported
its consolidated results for Jan-Mar after market hours yesterday. The
company
reported a net income of $54 mln, down 8.5% on-year. But net sales
rose
1.96% on-year to $2.55 bln. Novelis accounted for 66% of Hindalco's
revenue
in 2012-13 (Apr-Mar).
