Tata Steel Exhibits Modest Gain Amid Market Fluctuations

On 10 October 2024, Tata Steel shares exhibited a modest rise, trading at ₹160, marking an increase of 0.63% from their previous closing price. In the same timeframe, the Sensex index showed a 0.33% increase, with a trading figure of ₹81,735.45. This development comes as the stock hit intraday highs of ₹161.2 while touching lows of ₹156.5.

From a technical standpoint, Tata Steel is positioned above the 20, 50, and 300-day Simple Moving Averages (SMA), yet remains below its 5, 10, and 100-day SMAs. The stock finds support at its 20, 50, and 300-day SMAs and faces resistance at the 5, 10, and 100-day SMAs. The SMA values are as follows: 5 days at 164.91, 10 days at 164.73, 20 days at 158.16, 50 days at 155.52, 100 days at 163.76, and 300 days at 155.57.

Classic pivot level analysis indicates key resistance levels at ₹161.3, ₹163.55, and ₹164.9, while the support lines are mapped at ₹157.7, ₹156.35, and ₹154.1. The day witnessed an escalation in trading volume, 42.71% higher than the previous session on the NSE and BSE, often seen as a crucial indicator alongside price trends. Technical analysis by Mint suggests a current phase of negative near-term movement post-consolidation, recommending investors await bear confirmation before taking short positions.

From a fundamental analysis perspective, Tata Steel’s return on equity (ROE) stands at -4.55%. Analysts provide a median one-year forecast with a 3.75% upside potential, setting the target at ₹166. Promoter holdings remain at 33.19%, mutual funds at 10.88%, and foreign institutional investors at 19.68%, as per the June quarter filings. Notably, mutual fund holdings saw a decline from 11.20% in March to 10.88% in June, whereas FII holdings inched up from 19.61% to 19.68% over the same period.

Despite the slight rise in Tata Steel shares, peer performance varied. Lloyds Metals & Energy saw a dip, contrary to the upward movements observed in JSW Steel, Jindal Stainless, and Shyam Metalics & Energy. Overall, Nifty and Sensex observed positive movement, gaining 0.28% and 0.33%, respectively.

Meanwhile, international brokerage Jefferies maintained a positive outlook for Tata Steel, signaling a buy position with a target price set at ₹200 per share. The company plans significant overseas investments to refinance debt and assist restructuring in the UK, with anticipated volume rises in FY26. Lower coking coal prices are expected to bolster margins, despite potential challenges from weak Asian steel markets and imports from China.

According to Subash Gangadharan, a technical analyst with HDFC Securities, investors should consider a price target of ₹175 and ₹188, establishing stop losses at ₹150 with a two-month timeframe. “After a fall in recent months, Tata Steel has found support near ₹142 levels and has rebounded,” Gangadharan remarked.

The publication Business Today stresses that its stock market news serves informational purposes only and advises consulting financial professionals before executing investment decisions.