Stocks of major steel companies are seen gaining slightly next week tracking domestic equities, which may trade in the positive zone following steps taken by the government to boost the economy, and hopes that China may announce stimulus measures. China is the world's largest producer and consumer of steel. The upside in the steel stocks, however, is seen limited in coming sessions as the sector lacks independent positive factors.
In the global market, steel is in over capacity and at the same time iron ore prices are weak all this turns out to be disadvantageous for steel companies due to which there is no much upside seen in steel stocks (in coming sessions).
There is no sector specific news that can lend support to steel companies as the demand and supply scenario is discouraging. Weak demand due to slowing global economic growth has led to higher supply in the market.
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