GOLDEN RULES FOR TRADING

Metal Stocks Outlook for the week – 13 to 17.06.2016 (Seen up next week; Hindalco to lead gains)

Metal Stocks Outlook for the week – 13 to 17.06.2016
(Seen up next week; Hindalco to lead gains)

The shares of major metal and mining companies are seen trading with a positive bias next week due to a rise in base metal prices. The trading, however, will be stockspecific. In the coming week, shares of Tata Steel Ltd may remain subdued and trade in the range of 325-348 rupees. Yesterday, the stock ended down 2% on reports that the company is exploring reversal of a decision to sell its UK business due to pressure from the referendum-bound UK government.

The UK government is said to believe that Tata's exit will reflect badly on the country's business environment. Sale of the UK business is essential for Tata Steel to trim losses and cut debt. Hindalco Industries remains a top pick, as the company's primary aluminium operations are recording a strong performance despite depressed prices on the London Metal Exchange, while copper remains stable and profitable.

The Indian steel sector has been under pressure due to rising imports from China, Japan and Korea. Recently, however, the sector received a boost in the form of minimum import price, which seeks to restrict cheap imports, especially from China and members of the Commonwealth of Independent States.