BNP Paribas downgrades JSW Steel on valuations, no rupee benefits

Thu Sep 26, 2013 11:04am IST

A labourer works inside a steel factory on the outskirts of Jammu June 12, 2012. REUTERS/Mukesh Gupta/Files

A labourer works inside a steel factory on the outskirts of Jammu June 12, 2012.

Credit: Reuters/Mukesh Gupta/Files

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Reuters Market Eye - BNP Paribas downgrades JSW Steel Ltd(JSTL.NS) to "reduce" from "hold", citing expensive valuations after recent outperformance due to a delay in the U.S. Federal Reserve's tapering of monetary stimulus in September.

The investment bank says its checks with steel producers and traders suggest that the benefits of a weak currency are neutralised when the rupee is around 60-62 to the dollar.

"With the INR hovering at these levels, a sharp recovery in imports is unlikely and the export opportunity no longer looks as attractive," BNP Paribas said in a report.

BNP Paribas maintains its "hold" on Tata Steel Ltd (TISC.NS) and Steel Authority of India Ltd (SAIL.NS).

JSW Steel falls nearly 1 percent, while Tata Steel is up 1.34 percent and SAIL is down 0.38 percent at 1102 am.

(Reporting by Abhishek Vishnoi)

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