Shares of metal companies such as Tata Steel NSE 0.46 %, Hindalco NSE 1.66 %, and National Aluminium NSE -0.32 % fell up to 10% in the last week amid recessionary fears in the US, low demand in China, and poor Q3 results. Shares of Hindustan Zinc NSE 0.08 %, JSW Steel NSE 0.81 %, Steel Authority of India NSE 1.02 %, and Vedanta NSE 1.77 % also declined up to 4% in the week gone by.
“Markets had been overly optimistic with the Chinese reopening considering China accounts for 50% of the global steel demand, but the post-Covid China scenario is depressing as the infra developments, residential demand, and capex will be materially lower than going into Covid – times have changed, and the market is realising this,” he added.
In Q3, steel companies also saw a decline in their profit, which led to a further fall in stock prices. Tata Steel in Q3 FY23 reported a consolidated net loss of Rs 2,224 crore for the December quarter, while the company had posted a profit of Rs 9,572 crore in the last-year same period.
Meanwhile, JSW Steel also reported an 89% YoY fall in net profit at Rs 490 crore for the three months ended December 2022. Vedanta also reported a 42% YoY decline in its consolidated net profit to Rs 3092 crore for the quarter ended December 31, 2022.
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