Metal Stocks Outlook for the week – 07 to 11.11.2016
Stocks of major metal and mining companies are seen rising next week following rise in prices of
metals in global markets. The outcome of the US presidential election is likely to lend cues to the
broader market and may have an indirect bearing on the stocks of metal and mining companies.
Metal stocks have risen for most part of the week and the momentum is likely to continue next week
as well. Nifty Metal index has risen 61% since September 2015.. Domestic steel players have taken
price hikes in October as the sentiment improved post monsoon and also global prices surged. We
believe, cost push will trigger a further increase in prices; however, with overall poor demand
scenario, the extent may not be significant enough to offset higher costs. Expecting input price of most of the steelmakers to rise owing to a rise in price of iron ore and
coking coal internationally. Non-ferrous players on the other hand seem well positioned and any
trade restriction measures by the government will be beneficial for Aluminium producers as the
report said. Currently, the government is reviewing a case for a safeguard duty on import of
Aluminium products.
On global front, focus would be on the outcome of the US elections. If the Republican nominee,
Donald Trump, wins US election, equities globally are likely to fall further as he has called for
stringent trade norms for the US. This could hurt major exporting companies worldwide. However,
if Democrat nominee Hillary Clinton comes to power, it may lead to a rebound in shares as she is
expected to retain the current foreign policies.
Among stocks, market participants would be eyeing shares of Hindalco Industries, which would
detail its Jul-Sep earnings on Nov 12. The Hindalco stock has been one of the best performers on
Nifty 50 with over 84% gains so far in 2016.
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