Bullish on Tata Steel, JSW Steel: Chintan Mehta

Chintan Mehta, metal analyst at Sunidhi Securities told CNBC-TV18, "We need to understand what is going on in ferrous and non-ferrous space. If we go for ferrous space the way iron ore has behaved in the last two months, the low was USD 50 and yesterday again it gained four percent to close around USD 59-60 dollar. So that is 20 percent hike in iron ore prices globally and that is on the back of many commentary from Vale and Rio where Vale said they will be cutting out production by about 30 million tonnes and Rio saying that they won’t be going out with their capacity addition aggressively. So that and coupled with that Chinese ore inventories has fallen by three or four million tonnes week on week basis. So that gave a bit of spurt in iron ore and we expect that to continue for a while and that has actually given a comfort that still prices are somewhere near bottom now and when you couple that with Tata Steel or JSW Steel particularly Tata Steel has altogether different reasons what we are facing at this point of time."

"The euro dollar index has actually moved up from 1.1 to 1.13. So that kind of dollar index is giving a strength to the domestic prices when northern Europe is concerned. So the street is getting more excited about better numbers in terms of Europe operations are concerned. So, we affirm that view and we are bullish on Tata Steel and we are recommending our clients to buy even at those levels, but in a month or so we need to see how steel prices behave further. Till then we are still bullish on Tata Steel and JSW Steel," he said.