Tough time ahead for steel producers, equity markets continue to remain under pressure; all this and more on Moneycontrol Pro
In the near term, China’s steel production cuts that are targeted at reducing pollution could influence output trends, and therefore prices.
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One of the reasons for the current slowdown, it is said, is the body blow dealt to small businesses by demonetisation.
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The going is tough for India’s steel producers
Rating agencies are getting worried about the steel industry. Investors had turned pessimistic even earlier, with shares having falling sharply since early July. They would be wondering how much more pain they may endure. A large part of that answer lies in the minds of the leaders of the US and China and how they resolve or prolong their trade war. China’s industrial economy is slowing down. In the near term, China’s steel production cuts that are targeted at reducing pollution could influence output trends, and therefore prices. How long will these uncertainties engulf the steel sector? Click here to read more.
Gloom and doom has not touched these frontline stocks
Indian equity markets continue to remain under pressure with selling by foreign investors continuing unabated since the Budget. Analysts, be they fundamental or technical, are all forecasting lower targets for the market. Data from the derivative market also suggests further weakness. The put-call ratio is at the highest level since 2011 and short positions by foreign portfolio investors (FPI) continue to hover around its highest levels of around 1.40 lakh contracts. Despite the gloom and doom, some stocks and sectors are showing strength in the market. Which are these stocks and will this run in their share prices sustain? Click here to read.
Ideas for Profit: This AC stock offers value
This company designs and manufactures room air conditioners (RACs) and their components for big brands such as Voltas, Godrej and Hitachi. It also makes parts for washing machines, refrigerators and televisions. We like the company because of strong relationships it has with big RAC brands, the high utilisation levels at its manufacturing units, benefits that will flow from its acquisitions and generally favourable prospects for the AC industry. Strong barriers to entry, its thorough understanding of the air conditioning market, the latent demand for ACs in India and benefits from acquisition make this company's stock hard to ignore. Click here to read more about this stock pick.
RITES: Strong growth at attractive valuations
Despite the huge correction in share prices of midcap and small-cap companies, and a subdued economic environment, many high-quality PSU stocks have stayed strong. RITES, a PSU in the railways engineering space, is one such high-quality company that continues to deliver strong growth and yet trades at attractive valuations. It is trading at 9.7 times FY20 estimated earnings. At the current market price of Rs 224 a share, it offers a dividend yield of about 4.3 percent. But this has to be weighed against the risks of execution faltering and the government not spending as promised. Click here to learn what investors should do.
Picks from our technical analysts
1. Apollo Tyres: This is among the stronger stocks in the current market scenario. It has now formed a bullish follow-through pattern suggesting further upside. Click here to learn how to trade its futures.
2. Ashok Leyland: This stock Ashok Leyland is likely to remain weak or at best, move sideways. Click here to learn how to use its options to make a profit.
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