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Informist, Friday, Dec. 27, 2024

MUMBAI – Shares of metal companies are seen in a range next week amid uncertainty around the quantum of duty against cheap steel imports and tariffs by US President-elect Donald Trump. Further, the December quarter earnings are seen mixed with steel-makers expected to continue to struggle due to weak prices, while aluminium companies may see a better quarter due to a rise in their product prices.

The uncertainty around policies by Trump is a big issue for global markets, said Sunny Agrawal, head of fundamental equity research at SBICaps Securities. He said that if Trump's tariffs further hurt China's growth, it could create more problems for Indian metal companies, who are already suffering from cheap imports from China.

Due to weak prices in India hurting growth of companies, analysts expect some relief from the government. Some media reports this week said the government was assessing the possibility of a 25% duty on cheap steel imports. However, Agrawal pointed out the government was conscious of the fact that such a move could lead to a rise in prices and inflation in India. Due to this, some analysts were conservative in their expectations of the extent of duty and expects a duty of only 12-15%.

Weak product prices have been a pain for the steel-makers in India for sometime now. Motilal Oswal Financial Services, in a note on Monday, said the pain may continue for some more time. "Our channel checks suggest that steel prices would remain under pressure over the short to medium term on account of muted demand," the brokerage said.

Nifty Metal lost over 1% this week despite positive news about the government mulling duty against steel imports. This was the second straight week of decline, leading to a fall of nearly 8% during this period. With this, the sectoral index is likely heading to its third straight month of fall. 

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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:

End

Reported by Anshul Choudhary

Edited by Akul Nishant Akhoury

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