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Informist, Friday, Oct. 25, 2024

MUMBAI – Shares of metal companies may consolidate next week after sharp losses in recent sessions, analysts said. Mixed earnings by these companies are likely to play a key role in deciding stock movements next week. Metal stocks are likely to mirror the overall trend in the market next week, particularly after the recent broad-based sell-off across sectors.

The Nifty Metal index ended down for the third straight week Friday. It ended in the red for all five sessions this week. Shares of Hindustan Copper and Steel Authority of India fell the most among constituents in the index this week. The index is expected to find support at 8600 points, an analyst said. Friday, it ended at 9048.95 points, down 2.4%.

Shares of JSW Steel are expected to take a beating in the near term, owing to disappointing financial performance in the September quarter, a research analyst at a domestic broking firm said. JSW Steel, during market hours Friday, said its consolidated net profit for the September quarter fell 84% on year and revenue fell nearly 11%. The fall in revenue was likely due to a fall in sales volume and lower domestic realisations due to competition from cheap Chinese steel imports.

Except for Hindustan Zinc, shares of all companies in the Nifty Metal index ended the week with losses. Hindustan Zinc had reported better-than-expected earnings for the September quarter, with net profit rising slightly more than analysts' expectations and revenue was significantly above estimates. The company's on-year growth in net profit and revenue for the reporting quarter were both the highest in the last eight quarters. The stock is still up nearly 1% this week, even though it closed 5.5% lower Friday.

Valuations of metal stocks are reasonable and metal companies have largely reported positive earnings for the quarter barring a few, analysts said. There hasn't been enough follow-up in metal stocks after China's recently announced stimulus measures, the analyst said. Investors will watch out for developments and economic data from China for more clarity on demand trends, which could have an impact on the sector. 

TOP HEADLINES

* Earnings Review: JSW Steel reports worst revenue fall in 17 qtrs, volume dn
* MSTC inks pact to transfer stake in Ferro Scrap Nigam to Japanese co
* Lloyds Metals Jul-Sept PAT rises 30.3% YoY to INR 3.01 billion
* Earnings Outlook: Volumes elusive but higher realisation to aid Hindalco PAT
* Analyst Concall: Bifurcation talks with govt still on, says Hind Zinc CEO
* Analyst Concall: To cut net debt to INR 20 bln by March end - Hind Zinc mgmt
* JSW Steel JV with Japan co to acquire thyssenkrupp Electrical Steel India
* Earnings Review: Hind Zinc Jul-Sept growth in PAT, revenue highest in 8 qtrs

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:

End

Reported by Alina Geogy

Edited by Manisha Baxla

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