Tata Steel Shares hit lower circuits on Monday morning. Three steel shares namely – Tata Steel, Steel Authority of India and JSW Steel. The government’s decision to calibrate custom duty on raw materials byways of reducing import duty and levying export duty has not gone very well with Dalal Street.
Tata steel share price
Tata Steel share price hit a gap of Rs 73 per share and went on a even lower to Rs 1052 a piece levels on BSE.
At the same time, JSW steel share opened at Rs 567.80 per share level.
As per reports from the experts, “In a bid to curb inflation the Ministry of Finance announced export duties on most steel products, along with an excise duty for petrol and diesel. This is likely to divert more supply toward the domestic market. With prices now being guided by the export parity philosophy, it could lead to a sharp correction in steel prices in India. Lower coal and iron ore prices and a tighter global balance are unlikely to offset this. Hence, we cut our estimates across our steel company coverage and downgrade all three stocks: Tata Steel from BUY to Underperform, JSW, from BUY to outperform.”
The reason stated by the officials for the price drop, “The Indian Government has imposed export duties on steel, steelmaking raw materials and intermediaries to preserve higher domestic supplies and control rising prices. Most of the exports of steel will attract a 15% export duty now. We see this as an extremely negative development for the steel sector and expect broad-based multiple de-rating. We downgrade steel/stainless equities under our coverage to either HOLD/REDUCE/SELL.