Shares of Tata Steel were Sensex’s biggest losers in a rally in today’s broader market. Tata Steel shares were the biggest Sensex gainer yesterday, rising 3.02 percent to Rs 104.20. The BSE metal index was the largest gain in the previous session, closing 565 points higher at 19,264. However, the index gained and was the biggest loser today, dropping 286 points to 18,978 in early trading.
Shares of Tata Steel hit an intraday low of Rs 101.6, down 2.5 percent on BSE. The stock is trading higher than the 5-day, 20-day and 100-day moving averages, but lower than the 50-day and 200-day moving averages. The stock lost 21.72 percent in a year and fell by 8.5 percent in 2022.
In one month, the stock gained 6.77 percent. Total 25.38 lakh shares of the company changed amounting to a turnover of Rs 25.94 crore on BSE. Tata Steel’s market cap dropped to Rs 1.23 lakh crore.
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Also on Nifty, Tata Steel was the biggest loser, dropping to 2.62 percent to Rs 101.45 from the previous close of Rs 104.20. Jindal Steel and JSW Steel were the other losers, with 2.92 percent and 2 percent respectively. Shares of Hindalco also lost 2.49 percent to Rs 402.05 on BSE. The stock fell after three days of gains. On Nifty, Hindalco stock lost 2.66 percent to Rs 401.40 from its previous close of Rs 412.40.
Steel inventories are likely to remain under pressure due to the global slowdown and delays in infrastructure activities such as road and highway construction, which could put additional pressure on steel prices in the coming quarters.
Prices of HRC (hot rolled coils) in India rose to Rs 78,800 in April 2022, before falling after the government imposed an export duty on steel products in late May 2022. HRC prices have fallen nearly 40% in the past six months due to oversupply and weak demand caused by the monsoon season.
On the outlook for Indian steel companies, Siddharth Oberoi, founder of Prudent Equity, said: “Indian steelmakers have seen revenues decline due to reduced realisation, rising input costs and low production and demand in the market. Companies that depend on export markets have been hardened. hit by falling steel prices around the world. JSW Steel, one of India’s largest steel producers, said in its latest earnings release that the export tax imposed in May 2022 has boosted the company’s exports by 62% year-over-year. decreased and 37% quarter-on-quarter.”
“The company’s realization also declined by more than 16% on a sequential basis due to a decline in world prices. In the coming quarters, most other industry players are also expected to see a sharp decline in profits,” Oberoi added.