Metal Stocks Outlook
Seen up next week; weak global demand may weigh
This story was originally published at 19:19 IST on 20 September 2024
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MUMBAI – Shares of metal companies are expected to extend gains next week, according to analysts. Metal company stocks will also take cues from global markets due to the lack of domestic triggers, they said. However, concerns regarding a weak demand scenario globally could limit gains.
Foreign brokerages remain positive on steel companies. Brokerage firm Macquarie today said that steel companies are well-positioned to benefit from domestic price premiums to import parity, steady leverage, and easing input costs, as per media reports. According to Morgan Stanley, the domestic demand environment for steel remains strong but so does domestic supply.
Morgan Stanley said that steel stocks have underperformed the broader market during the year and expects them to continue to do so, given the lack of upside triggers and near term unattractive valuations. The brokerage added that there are still downside risks to domestic steel prices.
Unlike in other regions, steel consumption in India has been showing green shoots, driven by more public and private capital expenditure, brokerage firm Anand Rathi said in a report this week. "The growth of the steel sector is also directly linked with the rate of urbanisation. Unlike developed economies which are nearing peaks, India is now in a growth phase," the brokerage said.
Even though metal stocks are expected to rise next week, the Nifty Metal index is facing tough resistance around 9500 points, Shiju Koothupalakkal, technical and derivatives analyst at Prabhudas Lilladher, said. However, the index could rise more once it breaks the resistance zone, he added. Koothupalakkal pegged the support for the index at 9200 points. Today, the Nifty Metal index ended 1.7% higher at 9404.30 points.
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Following are the resistance and support levels for the stocks for next week as per calculations by Informist based on their prices on the National Stock Exchange:
| Company | Price | Week-on-week change in % | Resistance | Support |
| Hindalco Industries | 694.40 | 3.10 | 704.00 | 683.90 |
| Hindustan Copper | 329.80 | 4.70 | 335.90 | 320.60 |
| Hindustan Zinc | 500.70 | 0.80 | 510.90 | 487.20 |
| Jindal Steel & Power | 1009.40 | (-)2.10 | 1056.00 | 980.30 |
| JSW Steel | 981.55 | 2.80 | 1001.10 | 955.50 |
| NMDC | 212.54 | (-)3.70 | 220.70 | 207.70 |
| Steel Authority of India | 126.28 | (-)4.50 | 129.50 | 123.80 |
| Tata Steel | 152.02 | (-)1.00 | 154.70 | 149.30 |
| Vedanta | 449.95 | (-)0.90 | 462.20 | 442.60 |
| Nifty Metal | 9404.30 | 0.40 | 9517.60 | 9272.40 |
| Nifty 50 | 25790.95 | 1.70 | 26111.60 | 25266.30 |
| S&P BSE Sensex | 84544.31 | 2.00 | 85649.00 | 82635.30 |
End
Reported by Noel John
Edited by Saji George Titus
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