Indian steel stocks fell sharply on Monday after the government announced an export levy on some steel products.
Tata Steel Ltd. 500470, -11.99% shares were recently 11% lower, JSW Steel Ltd. 500228, -12.22% shares were down 12% and Jindal Steel & Power Ltd. 532286, -16.82% shares dropped 15%.
India’s Ministry of Finance said Saturday that it would impose duties on the export of some steel products, effective Sunday, while cutting taxes on gasoline and import levies on raw materials used in steel production, in response to rising inflation.
The export duty will likely not only hurt exports, but also weigh on domestic prices, Jefferies analysts Nitij Mangal and Sagar Sahu said in a research report. They remain cautious on the Indian steel sector due to a weakening global outlook, and with the new export duty posing further margin pressure, the analysts said.
India’s benchmark Sensex 1, +0.72% was recently 0.6% higher, led by auto makers that may benefit from lower steel and gas prices.
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