Business Daily from THE HINDU group of publications
Saturday, Jul 14, 2007
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Business Daily from THE HINDU group of publications Saturday, Jul 14, 2007 ePaper |
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Stock Markets Markets - Stocks Agri-Biz & Commodities - Metals
Jayanta Mallick Kolkata, July 13 The extraordinary premium that Rio Tinto is paying for Alcan has spurred revaluation of base metal stocks in the global markets on Friday and its ripple effect on the Indian metal stocks too has been felt. The 15 stock BSE Metal Index was the super-performer posting a 4.58 per cent gain, highest among all indices. Other metal stocks outside the index also posted gains on various recent positive news flows. Rio Tinto defended the $101 per share offer price for Alcan topping Alcoa’s hostile bid, saying that it was justifiable in view of the fact that the Chinese demand for metals was rising abnormally and global metal resources were getting scarcer by the year. Performers
Among the aluminium stocks, Hindalco moved up by 6 per cent, while Sterlite gained 3.53 per cent and Nalco improved by 3.78 per cent. Hindustan Zinc moved up 8 per cent, as lead hit another fresh lifetime high in the international markets, supported by ongoing supply fears from China and Australia. Investment bank Calyon upped its 2007 full-year copper price forecast to $7,330 per tonne from $6,920, largely on the market’s reaction to the Chilean mine workers’ strike. It also raised its 2008 forecast to $7,060 from $6,000 on tight supplies. Among other metals, lead hit another fresh lifetime high, supported by ongoing supply fears from China and Australia. Ferrous metal counters
According Mr Ajay Jaiswal of Angel Broking, though local steel prices have softened in the last couple of weeks locally, the stock market seems to be factoring in future earnings a little more aggressively. “Early during this year China was being considered an emerging exporter of metals, particularly of steel. There was also apprehension of possible dumping. However, recent trends seem to suggest otherwise”, he added, saying that the demand gap in metals may widen rather than shorten in the medium to long term. Incidentally, global investment banker UBS on Thursday said: “Bulk commodity fundamentals appear to be tightening once again, as demand growth outpaces global supply and availability issues emerge in an environment of tight shipping markets.” It revised its 2008 forecast of iron ore price rise to 25 per cent from the 10 per cent predicted earlier. Ore miner Sesa Goa moved up by 6.12 per cent. SAIL, which recently cut its product prices, gained 10.5 per cent and Tata Steel finished with a gain of 3.35 per cent.
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