The Hindu Business Line : Profit-taking weakens metals, mining stocks

Kolkata, June 3 Metals and mining stocks continued to weaken for two consecutive days on profit booking largely by institutional investors. The BSE Metal Index declined by 0.39 per cent, but its loss on weekly basis was lower at 0.24 per cent. However, steel stocks at Tuesday’s close managed to pare down the losses compared with that on Monday. Aluminium and zinc stocks closed lower.

Iron ore miner, Sesa Goa, which led the fall on Monday, shed much of its weakness as an apprehension of ban on exports dissipated on Tuesday. It nevertheless finished in the red declining 0.8 per cent. It lost around 10 per cent on Monday.

According to Mr Pawan Burde, metals and mining stock analyst at Angel Broking, this short-term weakness has come after a rally last week in metal stock and could be deceptive.

Export tax hopes

Agreeing that LME inventory levels have recently gone up in base metals and had put pressure on the local aluminium and zinc stocks somewhat, he said the steel stocks could strengthen further this week if the Government removed export tax as expected on Dalal Street. Moreover, three-month self-imposed restraint on price rise by steel makers ends this month.

According to analysts, metal stocks did find buyers at lower levels on Tuesday.

According to Mr Ajay Jaiswal, President (investment strategies) at Microsec Financial Services said portfolio churning and profit booking was behind weakness in the overall metal stocks. “Steel stocks particularly have been affected by delivery based selling. But on weekly terms, steel stocks have outperformed the benchmark indices”.

Analysts also felt that the input and power cost increases have generally been dragging down the sentiment for the manufacturing sector players.

The Government’s earlier move of restricting selected steel exports has been factored in, analysts said.

Tata Steel closed down 0.73 per cent on Tuesday against its loss of 3.86 per cent on Monday. SAIL moved up 1.56 per cent against a decline of 3.54 per cent in the previous session, while Ispat Industries also 1.5 per cent against its loss 4.46 per cent on Monday.

Jindal Steel had finished down 5.15 per cent on Monday but today moved up 0.41 per cent. Bhushan Steel, however, finished further down 4.24 per cent after it had lost 3.52 per cent on Monday. JSW recovered 0.78 per cent. It was down 2 per cent at close on Monday.

Hindalco finished up 1.12 per cent. Yesterday it had declined by 5.05 per cent. Nalco increased its loss and was down 3.95 per cent. It had shed 5.11 per cent on Monday. Sterlite moved down 1.61 over its loss of 1.95 per cent on the previous session. Hindustan Zinc also closed lower on Tuesday by 0.29 per cent.

More Stories on : Metals | Stocks | Mining & Quarrying

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page