MARKET EYE-Morgan Stanley, Citi positive on India's Tata Steel

* Citigroup says oversupply in China and Europe leaves little
room for upside in steel prices, after global re-stocking
sparked a rally over the past three months.
* However, the bank retains a 'buy' rating on Tata Steel Ltd
and raises its target price to 508 rupees from 430
rupees, citing "inexpensive" valuations, a bottoming out of
earnings in Tata Steel Europe and more resilient volumes than
other Indian steel makers.
* Separately, Morgan Stanley adds Tata Steel to its Asia-Pacific
excluding Japan as well as Emerging Markets focus lists, saying
the company offers "a good restructuring story" due to rising
capacity, improved sales volumes and the commissioning of a new
coke oven battery.
* Citigroup also downgrades Steel Authority of India Ltd
to 'sell' from 'neutral' after the stock gained over
12 percent in past three months, already discounting
expectations of margin improvement in fiscal 2014.
* Tata Steel shares gain 1.2 percent, while SAIL shares are up
0.4 percent.

(manoj.dharra@thomsonreuters.com/abhishek.vishnoi.thomsonreuter
s.com@reuters.net)