Steel stocks Tata Steel, Jindal Stainless, SAIL (Steel Authority of India Limited), Kalyani Steel, Kalyani Forge, etc. were up in the range of 1-5% this morning even as the broader market was under strong selling pressure.
Steel stocks attracted buying power thanks to the government’s cut in export taxes on steel products and iron ore, analysts said.
The tax reduction, which took effect from last Saturday, is expected to boost domestic steel companies.
Jindal Stainless rose 6.54% to Rs 177.50 on BSE, while Public Sector Steel Authority of India increased 2.30% to Rs 82.45.
Kalyani Steel traded 3% higher at Rs 328.00. Tata Steel rose 0.28%.
However, JSW Steel traded 0.64% lower at Rs 703.95.
The sector index, the BSE metals index, was down 0.30%.
The BSE Sensex benchmark lost around 500 points, tracking the weakness of the SGX Nifty and other Asian indices. Analysts attributed the weak sentiment to the “harsh tone” of Fed officials over the weekend.
Federal Reserve Governor Christopher Waller stated that markets are “ahead” and interest rates will not fall until there is “clear, strong” evidence that inflation is falling.
Steel stocks attracted buying after the central government withdrew export taxes on lump iron ore and fines for Fe content below 58%, iron ore pellets and regulated grades. Import tax incentives for anthracite/PCI, coke, coke, semi-coke and ferronickel have also been withdrawn.
Exports of iron ore in lumps and fines with Fe content (iron content) below 58% will not be subject to export tax.
Export of iron ore in lumps and concentrates with Fe content above 58% will enjoy 30% export tax reduction.
Export of iron ore pellets will not be subject to export tax
In early May this year, export tax was increased due to the increase in steel prices.
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