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Informist, Friday, Apr. 11, 2024

MUMBAI – Analysts expect metal stocks to be volatile in the coming weeks due to uncertainty over product prices because of the trade war between China and the US. Though the 90-day pause in reciprocal tariffs on other countries led to rise in stock prices on Friday, the trade war between the US and China has raised worries about a slowdown in global demand.

"The ongoing tariff war and associated uncertainties would impact global industrial production and cause demand destruction for commodities," Kotak Institutional Equities said in a report earlier this week. "We find steel companies better placed than aluminum due to domestic trade barriers and a likely stimulus by China in 2HCY25E (Jul-Dec) to counter weaker exports...we remain cautious on the metals sector and would avoid bottom fishing."

Kotak Equities said the tariff war could lead to lower prices and hurt margins of all the companies in the sector. But, steel producers are better placed due to large domestic demand, while aluminium players are at a bigger risk if global demand slows down, the brokerage said.

Non-ferrous metal companies are expected to a report strong net profit growth for the March quarter due to better product prices and higher volumes. However, weak steel product prices are likely to impact earnings of steel companies such as Tata Steel and JSW Steel, which are expected to report a decline in net profit for the quarter, as per estimates by nine brokerages.

An analysis by Informist shows, 10 metal companies in the Nifty 200 index are expected to report a cumulative net profit growth of 43% on year, while revenue may be flat. Growth in profits will be largely led by non-ferrous companies.

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* JSW Steel's Jan-Mar consol crude steel output at 7.63 mln tn, up 12% on year

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 Ashish Shirke

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