Energy Crisis: China’s loss is Indian steel, chemical industries gain

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Energy Crisis: China’s loss is Indian steel, chemical industries gain
Energy Crisis: China’s loss is Indian steel, chemical industries gain

New Delhi, Oct 16 | China’s energy crisis is expected to give cost and production advantage to India’s chemicals and steel companies in domestic as well as international markets.

Notably, China’s worsening energy situation has impacted its industrial segments and forced factories to cut production.

It is also threatening to impact the growth of the country’s vast economy and place increased strain on global supply chains.

Globally, the increased coal prices, high logistics costs and logistical challenges have led to a rise in raw materials costs across sectors.

“However, the order books of Indian manufacturers would witness growth on account of lower supply by Chinese counterparts,” said India Ratings and Research (Ind-Ra).

“Moreover, the increase in raw material prices has led to a rise in the prices of the exported goods, and the resultant adverse impact on the terms of trade (export price to the input price) is one of the reasons for dollar strengthening against the rupee.”

As per the report, the weakened rupee coupled with China’s production crunch will give a boost to Indian exports.

“However, the increased coal prices have pushed up manufacturing costs globally, and the agency believes producers across sectors will pass the increased costs to the end-user industries, thereby leading to inflationary pressures, which could eventually trickle into the Indian economy as well.”

According to the report, China’s energy crisis and resultant likelihood of shutting down of Chinese companies or intermittent curbs on manufacturing would prove advantageous to Indian companies, as the demand for their products is bound to rise in both domestic and international markets.

“Furthermore, the agency opines that the domestic end-user industries for chemicals, such as dyes and pigments, pharmaceuticals, agrochemicals and others, will pass on the overall increase in costs to consumers, thereby maintaining their profitability.”

On the steel sector, the agency said the fall in China’s steel output and India’s imports of intermediate steel products would benefit Indian steel players by way of lower import risks and greater export opportunities.

Source: IANS

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Share Market Closing Bell: Nifty ends below 16,100, Sensex falls 303 pts

Share Market Closing Bell: Nifty ends below 16,100, Sensex falls 303 pts

Dalal Street found no relief with incessant sell off during the month. Nifty traded on a bearish note and ended at 16025.80 with loss of 99.35 points or 0.62 percent following weak global cues on Wednesday. While Banknifty closed at 34339.50 on the higher side with marginal gain of 49.35 points.

bhaskarlive market closing

The weakness in US stocks is playing out globally with signs of higher inflation, which has spoiled investors’ appetite for the Indian market as well. Rising India VIX to 25.28 has led Indices to big intraday swings on both sides. Sectorally maximum sectors closed on the negative side as Nifty IT and Nifty Media sheds more than 3 percent each. While Nifty Financial Services ended on a positive side gaining 0.68 percent.

In nifty stocks, NTPC, HDFCLIFE, SBILIFE were the top gainers while ASIANPAINT, ADANIPORT and TECHM were the prime laggards. Coming to the OI Data, on the call side highest OI witnessed at 16200 followed by 16300 strike price while on the put side, the highest OI was at 15800 strike price. Technically, Nifty has formed three black crow patterns in the daily chart suggesting bearishness would remain intact. We expect a rise in volatility as well on monthly expiry day.

Riding against the trend may not be beneficial for short term traders. All major moving averages are lying above 16300 levels. Indicators such as MACD and RSI are still struggling to overcome the oversold zone in the daily time frame. Overall, Nifty is having support at 15800 mark while on the upside 16300 may act as an immediate resistance for monthly expiry. While Banknifty has support around 33500 while resistance is placed at 35200 on the daily chart.

Om Mehra
Research Associate
Choice Broking

Source: Choice India

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