Sector Spotlight: Metal stocks remain a promising bid for this analyst; buy SAIL, JSW Steel, Tata Steel for winnings

Sector spotlight: The stock markets reduced losses towards the closing time, but ended lower on Monday. BSE Sensex ended the day at 56,975.99, down almost 84 points or 0.15 percent. Meanwhile, the Nifty50 ended at 17069.10 after hitting the intraday low of 16917.25. The 50-share index closed 33 points below Friday’s close.

The wider markets also ended negatively with the Nifty Midcap 100 and Nifty Smallcap 100 feeling the heat ahead of the meeting of the US Federal Open Market Committee (FOMC), which begins on May 4th.

Among the sector indices, Nifty Metal was among the winners. The 15-share index remains in the spotlight while commodity prices rise. The index ended at 6,363.10, an increase of almost 0.6 percent. Tata steel was the best winner and ended up 2 percent higher. The company is due to announce its Q4 results 2022 on Tuesday.

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The other top winners were National Aluminum Company Limited, followed by Ratnamani Metals and Tubes Limited, which rose 1.4 percent and 0.7 percent, respectively.

Nine stocks ended in the green while 6 closed in the green.

Market expert Nilesh Jain remains optimistic about the metal sector and sees Nifty Metal Index hitting levels between 6500 and 7000. The outlook is for the next 7-8 trading sessions, he added. He recommended three shares to Buy / Hold.

Jain is Assistant Vice President (AVP), Equity Research Technical and Derivatives at Centrum Broking.

SAIL: Buy | LTP: Rs 96 | Measures: Rs 105 | Stop Loss: Rs 93 | Up 9%

Another stock with a decent return potential is the Steel Authority of India Limited, Jain said. It has been the sector’s underperformer and now looks comfortable for an upside, he added. The downside risk is limited. The stock has corrected significantly from highs of Rs 151, it hit in May 2021. He said the risk-to-reward ratio was favorable at current levels.

Jain said the trends remain positive for this stock on charts.

JSW Steel: Buy | LTP: Rs 731 | Measures: Rs 760/790 | Stop Loss: Rs 700 | Up 8%

JSW Steel shares ended 0.5 percent from Friday’s closing price. The stock has been moving in opposition to the movement in the overall markets, he said. He recommends a buyout of the JSW Steel shares as the risk-to-return ratio remains favorable, AVP said.

Tata Steel: Buy | LTP: Rs 1297 | Dimensions: Rs 1350/1380 | Stop Loss: Rs 1210 | Up 6%

Jain said the stock remains in strong territory in terms of charts. The Tata Steel stock ended strong on Monday despite a weak show from the markets. Investors holding this stock should remain seated. There was a base formation in this stock at Rs 1210 and it should be seen as a strong support. One should only consider leaving this stock if this level is breached, he believed. Purchase on departure is recommended for levels around Rs 1250.

The company today announced a 37% annual growth in its consolidated net profit for the quarter ending March 2022. Jain said a strong result will only help the structure.

Also read: Tata Steel Q4 results 2022: Net profit jumps 37% to Rs 9,835 cr; the company announces Rs 51 dividend

(Disclaimer: The views / suggestions / advice expressed here in this article are solely by investment experts. Zee Business proposes that its readers consult with their investment advisers before making any financial decision.)