The buzz in the corporate world is currently surrounding the news of CSN's counter bid for Corus. There are reports that Tata Steel may raise its $8 billion offer for Corus countering the rival bid by the Brazilian firm. However, experts feel that the prices won't be dramatically higher.
On the back of these developments, could there be any rub off - positive or negative - on the metal space back home? Experts share their views on the Tata-Corus deal, and advise on how to trade the space currently.
With the general consensus remaining negative on the metal space, should you invest in metals now?
Ajay Srivastava of Dimensions Consulting says that his exposure to the metal space in limited. According to him, the metals space does not look very encouraging at the moment. "Though the prices did go up in the last 2-3 weeks in terms of the finished goods prices of steel, there again, the pressure on the cost is too much."
"Stay away from metals for the time being," warns Srivastava. "In a volatile market, metal stocks are always the first to get hit," he explains.
Technical analyst, Ashwani Gujral puts Tata Steel into perspective. He says that the next small support for the stock is around Rs 456.
Probably, with the way things are moving in the company, Gujral feels that the stocks might be headed down to about Rs 410-415. He says, "The market is not liking the deal that is happening out there, and further developments probably indicate that there is a lot more uncertainty unless it takes out Rs 500 and sustains there.
Keeping in line with what other experts feel, he adds, "I don't think there is much hope for this stock."For more information about trading and markets log on to www.moneycontrol.com
