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Informist, Friday, Aug 9, 2024

MUMBAI – Shares of metal and mining companies are expected to take cues from global equity markets, analysts said. The sector is expected to benefit if there is any more indication of rate cuts in the upcoming week, they said. However, some concerns remain over signs of a slowdown in China's manufacturing sector and recession in the US economy, they said. Now, investors await the June quarter earnings of Nifty 50 constituent, Hindalco Industries, scheduled for Tuesday.

Market participants are of the view that the US central bank will cut key interest rates at its next meeting in September. There is around 54% probability that the US Fed will cut rates by 50 basis points at the September meeting, according to the CME FedWatch Tool.

More macroeconomic data from China is required for a clearer picture of the economic situation there, Amish Shah, research analyst at Taurus Corporate Advisory Services, said. Some recent data had hinted at a slowdown in the manufacturing industry, he said. Data released earlier this month showed that manufacturing activity in China fell in July as compared with the previous month. This is expected to impact the domestic metal sector adversely as China's manufacturing industry is a major contributor to metal demand globally.

Ongoing geopolitical issues in West Asia may also impact the sector negatively, Shah said. Meanwhile, the June quarter earnings of most companies in this sector were not in line with expectations. However, Hindalco Industries is expected to post sequential upward growth in both the topline and the operating profit in the June quarter driven by higher domestic aluminium prices compared with the previous quarter. Earlier this week, the company's overseas subsidiary Novelis Inc reported a decline of 3% on year and 9% on quarter in net income for Apr-Jun.

The Nifty Metal index ended 0.8% higher at 9038.30 points today. However, the index has lost 3% this week. Most stocks have declined in comparison to the previous week. Shares of Jindal Stainless and Steel Authority of India were the worst-hit stocks in the Nifty Metal index this week, losing 11.5% and nearly 9%, respectively. Meanwhile, shares of Adani Enterprises were the top gainers, though they hardly gained 1%.

TOP HEADLINES
* JSW Steel's Jul crude steel production up 9% on year at 2.2 mln tn
* Trade min moots anti-dumping duty on steel pdts from Thailand, Vietnam
* Bloomberg: Vedanta to put steel business sale on hold
* Jindal Steel diversifies coking coal sources to cut cost pressures
* SAIL Apr-Jun PAT nosedives 93% YoY to 106.8 mln rupees; sales dn 1.5%
* HC junks income tax department's reassessment notice to Asian Colour
* Hindalco arm Novelis Apr-Jun revenue up 2%, volume up 8%, on year
* Godawari Power Apr-Jun consol PAT rises 24.1% YoY to 2.87 bln rupees
* Godawari Power appoints MD Bajrang Lal Agrawal as chairman
* Shyam Metalics' Jul stainless steel sales up 219% on yr at 5,699 tn
* Earnings Review: Improved margins, lower costs aid Vedanta results
* NCLT Mumbai OKs amalgamation of Tata Steel, The Indian Steel & Wire
* Vedanta approves $270 mln capex across fields in Rajasthan block
* Vedanta Apr-Jun consol PAT up nearly 37% YoY to 36.06 bln rupees
* JSW Steel submits notice to surrender iron ore block in Odisha
* Earnings Outlook: Rise in commodity prices to aid Vedanta performance
* Hind Zinc Apr-Jun PAT up nearly 20% YoY at 23.58 bln rupees

Following are the resistance and support levels for the sector's key stocks for next week, as per calculations based on their prices on the National Stock Exchange:

End

US$1 = 83.9550 rupees

Reported by Alina Geogy

Edited by Akul Nishant Akhoury

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