Metal Stocks Outlook for the week – 23 to 27.11.2015
Subdued
next week; Hindalco, Vedanta seen down Monday
Stocks
of major metals and mining companies are likely to be subdued next week on
continued
weakness in metal prices and the decline is likely to be led by stocks of
Hindalco
Industries and Vedanta which were excluded from S&P BSE Sensex index.
Hindalco
Industries and Vedanta were excluded from the S&P BSE Sensex index since
Dec
21, a notification on exchanges said yesterday. Traders are likely to react
negatively
to
the development in the first half of the week. Overall trading is seen volatile
ahead of
expiry
of November futures and options contracts on Thursday.
Global
commodity prices fell sharply on Thursday on concerns over slowdown in
demand
from China while the copper futures on London Metal Exchange hit a fresh
sixyear-
low.
The metal and mining sector is expected to improve only when there will be a
revival
in global commodities prices of copper, aluminium, zinc, steel, and iron ore
start
improving.
Hindalco
Industries and JSW Steel are seen in a consolidation phase. Vedanta is seen
slightly
better in comparison. However, it is not expected to sustain its growth. There
are
reports
that China has decided to cut production of zinc due to rising inventory. This
is
likely
to lift prices of the metal and that will be positive for Vedanta and Hindustan
Zinc.
The overall weak market sentiment may also weigh on the shares of metal
companies.