Domestic Steel Stocks on a Tailspin, Tank Upto 18% on Monday: Here’s Why

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  • Economic Indicators News
Domestic Steel Stocks on a Tailspin, Tank Upto 18% on Monday: Here’s Why
Credit: © Reuters.

By Malvika Gurung

Investing.com -- Shares of steel companies are on a tailspin on Monday, after the Government’s announcement to hike the duty on exports of iron ore to up to 50% from 30%, and imposed an export duty on some steel intermediaries to 15% on Sunday.

This came as a huge disappointment to domestic steel companies, as the move would impact their capacity utilization, and review their massive capacity expansion plans.

Steel scrips have dived almost 18% on Monday, with majors like Tata Steel (NS: TISC ), JSW Steel (NS: JSTL ) and the state-owned agency SAIL (NS: SAIL ) hitting the lower circuit in the session.

At the time of writing,

  • Jindal Steel & Power (NS: JNSP ) nosedived 17.7%,
  • Tata Steel fell 12.5% to Rs 1,024.15/share,
  • JSW Steel plunged 13.18%,
  • SAIL tanked 11.02%,
  • NMDC (NS: NMDC ) tanked 12.8%, while
  • Hindalco (NS: HALC ) and Vedanta (NS: VDAN ) lowered 3.75% and 3.1%, respectively.

As a result, the Nifty Metal index dived 8.25% or 470.75 points at the time of writing, with only Hindustan Zinc (NS: HZNC ) trading in the green, while all the other 14 stocks were deep in the red.

After the government’s announcements, most brokerages revised their outlook on the steel sector, downgrading the target prices on most stocks, as imposing an export duty would lower India’s export opportunities, aiding other countries to increase their share in the global market, which India will vacate, stated the Indian Steel Association.

This would indirectly impact the economic health of the country, it added.

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  • Dev Dutt @Dev Dutt
    If the davos gang disappears the economy will go in favour of mango people
    Like 1
  • Jai Hind @Jai Hind
    The Davos criminal gang behind all govt actions. Remember that.
    Like 0
  • Jai Hind @Jai Hind
    The Davos criminal gang behind all govt actions. Remember that.
    Like 0
  • Jai Hind @Jai Hind
    The Davos criminal gang behind all govt actions. Remember that.
    Like 0
  • Jai Hind @Jai Hind
    The Davos criminal gang behind all govt actions. Remember that.
    Like 0
  • Ramesh Kannan @Ramesh Kannan
    Very soon this duty will be revised downside and perhaps there could be a PLI. Reason is very simple, shrinking economy globally reduces demand, even locally for that matter. Therefore, there will be more supply and lesser demand. Given the cost advantage, indian steel will move up though not drastically. It’s always better to stay away from cyclicals
    Like 1
  • Ashish Singh @Ashish Singh
    Today the stell sector git effected because of hike on export duty, then there is a chance for medical or pharma sector after some days;
    Like 1
  • Ashish Singh @Ashish Singh
    Today the stell sector git effected because of hike on export duty, then there is a chance for medical or pharma sector after some days.
    Like 0
  • Ashish Singh @Ashish Singh
    Today the stell sector git effected because of hike on export duty, then there is a chance for medical or pharma sector after some days.
    Like 0

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