The metal index was down over a percent dragged by JSW Steel and Jindal Steel & Power which shed 3 percent each followed by Hindustan Zinc, Tata Steel and Welspun Corp.
The Indian stock market is trading in the red dragged by heavyweight Reliance Industries. Sensex is down 86.02 points or 0.21 percent at 40599.48, and the Nifty shed 27.40 points or 0.23 percent at 11903.
Among the sectors, the metal index was down over a percent dragged by JSW Steel and Jindal Steel & Power which shed 3 percent each followed by Hindustan Zinc, Tata Steel and Welspun Corp among others.
JSW Steel reported over 37 percent decline in consolidated net profit at Rs 1,595 crore for the quarter ended September 30, 2020. The company had posted Rs 2,536 crore profit for the same quarter a year ago, JSW Steel said in a BSE filing.
The company achieved production of 3.85 million tonne during the quarter ended September 30. With this, JSW Steel achieved average capacity utilisation of 86 percent in the quarter.
According to a report by ICICIdirect, metal stocks have been in a recovery mode and have showed significant resilience in the current market volatility. Stocks like JSW Steel have managed to retest their new 52-week high despite jittery market conditions, indicating the prevailing positive bias in the metal space.
The brokerage house believes stocks like Tata Steel will resume their uptrend on account of short covering. The open interest in the stock declined sharply in June amid short covering. Since September, the stock has witnessed a downtrend with short additions. These positions have begun to be covered. It expects momentum to be seen along with covering of short positions in the coming sessions.
Credit Suisse has downgraded JSW Steel to neutral from outperform and has raised target to Rs 300 from Rs 200 per share and does not see risk-reward favourable anymore. CLSA has maintained sell call on the stock and has raised target to Rs 245 from Rs 220 per share.
Jefferies has a buy call with target at Rs 380 per share. It has upgraded FY21-23 EPS estimates by 10-69 percent and expects margin to expand further from Q2 level. Realisations is likely to improve as benefit of higher spot and contract prices flows, it added.Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.