Tata Steel and Jindal Steel and Power (JSPL) dipped more than 3 per cent on the . Vedanta, Hindalco Industries, Steel Authority of India (SAIL), Moil and NMDC were down in the range of 2%-3%
Shares of metal companies were under pressure on Monday with the Nifty Metal index falling more than 2 per cent as investors grew increasingly anxious about the economic impact of China's spreading virus outbreak.
At 09:59 am, Nifty Metal index, the top loser among sectoral indices, was down 2.2 per cent at 2,734 points, as compared to 0.5 per cent decline in the benchmark Nifty 50 index.
Among individual stocks, JSW Steel slipped 5 per cent, and Tata Steel and Jindal Steel and Power (JSPL) dipped more than 3 per cent on the National Stock Exchange (NSE). Vedanta, Hindalco Industries, Steel Authority of India (SAIL), Moil and NMDC were down in the range of 2 per cent to 3 per cent.
The ability of the coronavirus to spread is getting stronger and infections could continue to rise, China’s National Health Commission said on Sunday, with more than 2,700 people globally infected and 80 in China killed by the disease.
China announced it will extend the week-long Lunar New Year holiday by three days to Febaruary 2 and schools will return from their break later than usual. Chinese-ruled Hong Kong said it would ban entry to people who have visited Hubei province in the past 14 days. The World Health Organization (WHO), last week, deemed “an emergency in China,” but not, as yet, for the rest of the world.
Meanwhile, JSW Steel slipped 5 per cent to Rs 258 on the NSE after the company posted an 88 per cent decline in its consolidated net profit to Rs 187 crore for the December 2019 quarter (Q3FY20, due to the severe loss in the international subsidiaries. The company had posted a consolidated net profit of Rs 1,603 crore in the year-ago period.
Its consolidated income during the October-December 2019 period was Rs 18,182 crore, registering a fall of 10.6 per cent over the year-ago period, the filing said.
The company's crude steel production during the October-December 2019 period stood at 4.02 million tonne (MT), up five per cent quarter-on-quarter.
"Production in the quarter was lower by five per cent y-o-y due to extended monsoon which impacted operations at both Dolvi and Vijayanagar," the statement said.
On the outlook, the company said the domestic steel sector is expected to grow significantly on the back of various initiatives of the government pertaining to the domestic infrastructure and supportive monetary policies.
"JSW Steel's third-quarter result reflects the challenges faced by the industry, with S/A EBITDA/ton at Rs 5,998 dropping to the lowest level in the past 15 quarters due to a sharp decline in steel prices," Motilal Oswal Securities said in results update.
"We like JSW Steel given its strong pipeline of projects and cost-reduction initiatives. On the domestic front, improving product mix and higher captive iron ore production should put a check on costs/support margins, along with the recently improved steel prices. Besides, the company's ongoing 5mtpa Dolvi expansion provides strong growth visibility. Any turnaround in the loss-making overseas operations could provide further upside", the brokerage firm added.
At 10:04 am, the stock was trading 3.31 per cent lower at Rs 262.90 as compared to 0.3 per cent dip in the Nifty50 index. Around 54.2 lakh shares have changed hands on the NSE and BSE so far.
Source: Business Standard