Shares of Indian steel companies including Tata Steel, Steel Authority of India, Jindal Steel & Power, JSW Steel and Bhushan Steel were down 1-4% Tuesday, tracking a global sell-off in commodity stocks, as investors fear the devastating earthquake in Japan will lead to a sharp drop in demand for products in the near-term.
However, these declines could in fact be a good buying opportunity for investors, some analysts say.
Several big companies including global automobile giant Toyota Motor and electronics major Sony have had to suspend production in Japan following the large-scale destruction due to the earthquake, which is expected to lead to a lower demand for commodities including steel, and is in turn driving the sell-off in share prices.
While some analysts expect there could be some more decline in steel shares, they advise accumulating the shares at lower levels.
The tragedy in Japan has led to a general sell-off in steel and other metal stocks. There could be some more sell-off in the next couple of sessions and don't invest right now.
Once Japan starts rebuilding projects, demand for steel will pick up, and Indian companies too will benefit, she said.
Indian steel firms are expected to benefit also from strong domestic demand from sectors like infrastructure and automobiles.
Several big companies including global automobile giant Toyota Motor and electronics major Sony have had to suspend production in Japan following the large-scale destruction due to the earthquake, which is expected to lead to a lower demand for commodities including steel, and is in turn driving the sell-off in share prices.
While some analysts expect there could be some more decline in steel shares, they advise accumulating the shares at lower levels.
The tragedy in Japan has led to a general sell-off in steel and other metal stocks. There could be some more sell-off in the next couple of sessions and don't invest right now.
Once Japan starts rebuilding projects, demand for steel will pick up, and Indian companies too will benefit, she said.
Indian steel firms are expected to benefit also from strong domestic demand from sectors like infrastructure and automobiles.
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