Price hike push metals higher

Mon, 30 Aug 01:30 pm

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Indian indices lost some of their opening gains on profit booking in heavy weights during the previous two hours of trade. Stocks from the metal and consumer durables space are among the top gainers, while stocks from the IT and FMCG space are the top losers.

The BSE-Sensex is trading up by 91 points while the NSE-Nifty is trading 25 points above the dotted line. The BSE-Midcap index is up by 0.5% while the BSE-Smallcap index is trading 0.6% above Friday’s closing. The rupee is trading at 46.84 to the US dollar.

Steel stocks are trading up led by Tata Steel and JSW Steel. As per a leading financial daily, steel companies are likely to hike prices by about Rs 1,000 per tonne within a few days on the back of pickup in demand after the end of monsoons. It may be noted that on an average steel prices are in the range of Rs 30,000-35,000 per tonne. Prices of raw materials like iron ore and coking coal have moved up during the current quarter. In fact the prices have almost doubled from levels during the corresponding quarter last year. However, domestic steel companies were unable to pass on prices due to the global scenario and the slowdown in demand due to a prolonged monsoon. However, globally the prices have moved up by US$ 50 per tonne in the past few months. This makes a case for the Indian companies to also increase prices especially as they see rising demand from sectors like automobile and construction in the next few months.

Auto stocks are currently trading firm led by Maruti Suzuki, Ashok Leyland and TVS Motor. A leading business daily has reported that auto major, Tata Motors is looking at sourcing ideas and technology from its UK subsidiaries Jaguar and Land Rover for improving its offerings. In a recent interview, the company’s senior management mentioned that it is looking at taking help from JLR in various aspects such as fits, finishes, noise, vibration and design elements, which the company is looking at working on for its set of passenger cars. In fact, it is reported that the company is looking at building a portfolio of cars that are more sophisticated than its current range of passenger cars such as the ‘Indica’, ’Indigo’ and ‘Nano’.

The company’s management indicated that it is looking to enter the South East Asian region sometime in the future. Apart from JLR helping the company out with widening its offerings, Tata Motors is looking at helping JLR out with improving its frugal engineering skills to build lighter and smaller engines for the future. As per the management, the emission norms in Europe will put JLR under pressure to launch smaller engines. This would in turn, throw up opportunities for synergies between the two companies. In addition, it has also been reported that Tata Motors is looking to assemble Land Rovers in India in an effort to push up volumes from the brand.