Metal Stocks Outlook for the week – 18 to 22.05.2015
(May
move downwards; JSW Steel seen weak)
( www.rupeedesk.in )
Downward
correction in stocks of major metal companies is seen continuing next week
after few consecutive sessions of outperforming the broader market last month,
as they are seen overvalued at current levels. The CNX Metal index fell 0.53%
this week. Some downwards correction can be seen in the next week, especially
after weeks of outperforming the broader market. The Street expects stocks of
JSW Steel Ltd to open weak on Monday as it posted poor Jan-Mar earnings minutes
before the stock market closed yesterday. The steelmaker's Jan-Mar consolidated
net profit plummeted 87% on year to 623.8 mln rupees. Stocks of Tata Steel Ltd
and Vedanta Ltd may outperform their peers.
No
deeper correction is seen next week in case in Tata Steel's stocks. The
108-year-old steelmaker on Thursday announced a 50-bln-rupee impairment charge
in the form of a non-cash write-down of the goodwill and assets mainly relating
to its UK business. Although stocks of the company fell yesterday, the analyst
does not see the shares falling sharply as the company's long products division
in UK wasn't doing well and the write-down was expected.
