Metal Stocks Outlook for the week – 18 to 22.04.2016
( www.rupeedesk.in )
Stocks
of major metal and mining companies are expected to trade with a positive bias next
week, taking cues from the broader market. The Nifty 50 last trading day ended
at
7850.45
points, up 1.8%, boosted by India Meteorological Department's forecast of an
above-normal
southwest monsoon this year, strong industrial growth in February, and a
benign
Consumer Priced Index-based inflation print for March.
The
overall sentiment on the sector has improved in the last two months after the government
imposed various protectionist measures--minimum import price, safeguard
duty,
quality control order, and initiation of anti-dumping probe--for the steel
sector. Apart from an uptick in global steel prices, imposition of a minimum
import price has
given
enough room to domestic manufacturers to raise product prices. The benefit of the
price rise will reflect on companies' earnings during Apr-Jun.
Hyderabad-based
mining major NMDC Ltd will be able to raise prices of iron ore, aided by a
surge in the commodity's prices in international markets. According to a report
by Business Insider, iron ore prices have surged 36% in 2016, and are at their highest
level since Mar 8 at $59.22 a tn.
Tata
Steel will continue to remain in focus, as the company is looking to sell its operations
at Port Talbot in the UK. Late last month, the company announced it was
looking
to sell its UK assets in parts, as a bleak outlook for the global steel market
had
made
the business unviable. On Monday, Tata Steel UK said it will sell its European
long
products business to Greybull Capital LLP