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

Sector Spotlight: Stock Markets pared losses towards the closing time but still ended lower on Monday. The BSE Sensex ended the day at 56,975.99, down by almost 84 points or 0.15 per cent. Meanwhile, the Nifty50 ended at 17069.10 after hitting intraday lows of 16917.25. The 50-share index closed 33 points below the Friday closing level.

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

Among the sectoral indices Nifty Metal was among gainers. The 15-share index remains under the spotlight as commodity prices soar. The index ended at 6,363.10, up nearly 0.6 per cent. Tata steel was the top gainer and ended 2 per cent higher. The company is to announce its Q4 Results 2022 on Tuesday.

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The other top gainers were National Aluminium Company Limited followed by Ratnamani Metals and Tubes Limited which were up 1.4 per cent and 0.7 per cent respectively.

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

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

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

SAIL: Buy| LTP: Rs 96| Target: Rs 105| Stop Loss: Rs 93| Upside 9%

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

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

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

JSW Steel stocks ended up 0.5 per cent from the Friday closing price. The stock has been moving contrary to the movement of overall markets, he said. He recommends a Buy in the JSW Steel shares as the risk-to-rewards ratio remains favourable, the AVP said.    

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

Jain said that the stock remains on a strong territory in terms of charts. Tata Steel shares ended strong on Monday, despite a lackluster show by the markets. Investors who hold this stock should remain stay put. There was a base formation in this stock at Rs 1210 and it should be seen as a strong support. One must consider exiting this stock only if this level is breached, he opined. Buy on declines is recommended at levels around Rs 1250.

The company today announced a 37% YoY growth in its consolidated net profit for the quarter ended March 2022. Jain said that a strong result will only aid the structure.

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

(Disclaimer: The views/suggestions/advises expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)