GOLDEN RULES FOR TRADING

Metal Stocks Outlook for the week – 11 to 15.04.2016 (Bias positive; Tata Steel to remain in focus)

Metal Stocks Outlook for the week – 11 to 15.04.2016
(Bias positive; Tata Steel to remain in focus)


Shares of major metal and mining companies are seen trading with a positive bias next
week on improved outlook for the sector, while Tata Steel is expected to remain in
focus as it will begin a formal sale process for its loss-making UK business on Apr 11.
Increase in global iron ore prices is expected to benefit domestic steel producers with
integrated plants, as they will have an edge over competitors having to purchase raw
material from other companies.

The overall sentiment towards the sector has improved in the last one month, and steel
prices have improved since the imposition of minimum import price on cheap imports
from China, South Korea and Japan, among others. On Wednesday, Tata Steel Chairman Cyrus Mistry, in a meeting with UK's Secretary of State for Business Sajid Javid, said the company will look at selling its UK assets in parts, if it can't find a buyer for the whole business, a media report said.

Although the sale of UK operations is seen as a positive for the company as it is a lossmaking
business, a probe by UK government's Serious Fraud Office concerning false certification, detailing Tata Steel's products might dent the company's prospects.
Steel Secretary Aruna Sundarrajan has said as the financial health of the sector has
improved, it was unlikely to get monetary aid, which was earlier under consideration.
However, in a negative, JSW Steel and Steel Authority of India's long-term issuer
ratings were downgraded recently by Fitch Ratings on account of loss of profitability,
and deterioration of financial profile, respectively.