Metal Stocks Outlook
Likely bearish, tracking global, domestic mkts
This story was originally published at 21:28 IST on 19 July 2024
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MUMBAI – Shares of metal companies may witness a bearish trend next week amid the fall seen across domestic and global indices, according to analysts. Choice Broking analyst Deven Mehata said the trend for the sector looks negative. This week, the sectoral Nifty Metal index ended 4.7% lower at 9256.30 points. The benchmark Nifty 50 and BSE Sensex both ended 0.1% higher.
Mehata said that though the stock markets ascended to record levels globally and domestically this week, a correction has set in due to selling for profit. "The broader market in the US and in India looks overbought, leading to profit-booking and corrections," he said.
Investors are certain to keep an eye on the quarterly results next week of companies in the sector. They may also adopt a cautious stance ahead of the Union Budget, which is to be presented in Parliament Tuesday. Mehata said investors should keep an eye on the movement in shares of Jindal Steel & Power.
Tushar Chaudhari, lead research analyst at broking firm Prabhudas Lilladher, also struck a cautious note in his research report, saying domestic steel prices are expected to remain muted during the monsoon as both global pricing and demand remain weak. Steel prices declined amidst import pressure, weak exports, muted domestic demand, and the expected ramping up of production capacities.
However, the report noted that the government’s continued focus on domestic infrastructure, and initiatives in the Budget to support the domestic manufacturing industry and improve the rural economy may aid the sector.
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* Fitch cuts Tata Steel's rating outlook to negative from stable
Following are the resistance and support levels for the sector's key stocks next week as per calculations based on their prices on the National Stock Exchange:
| Company | Price | Week-on-week change in % | Resistance | Support |
| Hindalco Industries | 663.00 | (-)4.20 | 696.20 | 642.10 |
| Hindustan Copper | 307.80 | (-)6.80 | 322.00 | 299.60 |
| Hindustan Zinc | 641.75 | (-)3.50 | 663.30 | 624.20 |
| Jindal Steel & Power | 946.35 | (-)6.70 | 1002.50 | 916.40 |
| JSW Steel | 889.45 | (-)4.80 | 942.10 | 860.20 |
| NMDC | 228.76 | (-)7.10 | 246.70 | 219.00 |
| Steel Authority of India | 141.82 | (-)5.70 | 150.00 | 136.70 |
| Tata Steel | 157.77 | (-)6.50 | 169.20 | 151.50 |
| Vedanta | 439.80 | (-)2.20 | 460.30 | 427.80 |
| Nifty Metal | 9256.30 | (-)4.70 | 9743.30 | 8997.60 |
| Nifty 50 | 24530.90 | 0.10 | 24977.90 | 24284.60 |
| S&P BSE Sensex | 80604.65 | 0.10 | 81985.80 | 79808.50 |
End
Reported by Pradeep Suresh V.
Edited by Rajeev Pai
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