Metal Stocks Outlook for the week – 04 to 08.04.2016
Range
bound; Tata Steel to be in focus
( www.rupeedesk.in )
Stocks
of major metal and mining companies are seen trading in a range next week
despite extension
of
safeguard duty on hot-rolled flat products of non-alloy and other alloy steel
in coils of width 600
mm
or more till March 2018 by the government due to higher valuations. Further,
Reserve Bank of
India
is likely to cut repo rate by 25 basis points in its first monetary policy for
2016-17(Apr-Mar) on
Tuesday
which is seen as a positive for the debt-laden sector. However, due to higher
valuations most metal companies saw a correction in the last week and the trend
is expected to continue next week
.
The
revival is still not seen in the sector and in last week we have seen some
correction in the stock
prices
for steel companies, it might continue. Focus would be on Tata Steel which
announced on
Wednesday
its decision to explore the sale of Tata Steel UK, in whole or in parts, and
restructure its
European
business, as a bleak outlook for the global steel market made the business
unviable. UK
government said it will provide with whatever support it can to protect
steelmaking in the country as it directly impacts jobs of an estimated 40,000
workers as per reports. However, the demand for steel is muted and has not seen
much improvement in both domestic and international markets.