INSUBCONTINENT EXCLUSIVE:
The weakness in metals stocks on news that the US would lift sanctions on Russian aluminium producer United Company Rusal, is unlikely to
last for too long as the development was largely priced in, said analysts
The Nifty Metal index fell 1 per cent to 3177.90, ending as one of the worst performing sectors on Thursday.
London aluminium prices fell to
a 16-month low on Thursday following the news of US intending to remove the sanctions on the company, which is owned by Russian billionaire
shares fell 3.5 per cent to Rs 61.85 and Vedanta fell 2 per cent to Rs 202.65
What we are seeing in the stocks is a sentimental impact
Securities views the potential annulment of sanctions as a non-event
(quarter-onquarter) upon extension of its general licenses;
2) tepid LME Al price reaction, implying the market had already factored in the
removal of sanctions;
3) formidable cost-push in Al is likely to cushion prices; and
4) low inventory at LME and SHFE (Shanghai Futures
Oswal.
Edelweiss, too, has a buy on the stock with a target price of Rs 307.
Bloomberg data showed that 26 of the 29 analysts tracking
Hindalco have a buy rating on the stock with consensus target price at Rs 310.7.
