Liberation Day effect: Tata Steel shares slip 19% in two days, approach 52-week low; what's next?

Shares of Tata Steel Ltd have crashed 19% in the last two sessions as US President Donald Trump's tariffs announcements on Liberation day have roiled markets across the globe. 

The Tata Group stock slipped 11.56% in the current session amid bloodbath on Dalal Street today.It slipped to Rs 124.20 against the previous close of Rs 140.45. The stock has slipped below the Rs 125 mark (intraday basis) for the first time since January 28 this year. The stock  hit an intraday low of Rs 124.70 in that session. Tata Steel stock touched a fresh 52-week low of Rs 122.60 on January 13, 2025. 

Market cap of the firm slipped to Rs 1.59 lakh crore. Total 58.99 lakh shares changed hands amounting to a turnover of Rs 74.68 crore on BSE. The stock was the top loser on Sensex today. In the previous session too, the stock fell 8.6% (most on Sensex) to close at Rs 140.45 on BSE. 

The Tata Group stock has a one-year beta of 1.4, signaling high volatility during the period. 
 
The stock is trading lower than the 5 day, 10 day, 20 day, 30 day, 50 day, 100 day, 150 day and 200 day moving averages. In a month, the stock has fallen 16%.  It is down 22% in six months. 

The relative strength index (RSI) of Tata Steel stock stands at 35.3, signaling it's trading neither in the overbought nor in the oversold zone.

Ravi Singh, SVP - Retail Research, Religare Broking said, "Tata Steel's daily chart reflects a strong bearish sentiment, marked by a sharp gap-down of over 9%, accompanied by elevated selling volume. The price has decisively rejected the long-term descending trendline and broken below the 50-day EMA, signaling intensified selling pressure. The daily RSI has dropped below 30, entering firmly into oversold territory. If the stock continues to trade below the Rs 130–Rs 132 level, it could potentially decline further toward the Rs 110–Rs 100 range."

In a recent round of tariff revisions, copper, zinc, nickel, and tin were exempted from country-specific tariffs. However, the U.S. is now considering imposing a tariff on copper, one of the key industrial commodities, which could further impact market sentiment."

Divyam Mour, Research Analyst, SAMCO Securities said, "While Tata Steel has limited exposure to the US export market, the broader impact of heavy tariffs on exports by China, Japan, and South Korea has raised concerns. These countries may resort to dumping cheaper steel in India, intensifying competition and pressuring profit margins. Additionally, the ongoing tariff war has heightened fears of a global economic slowdown, negatively impacting demand from key sectors such as construction, manufacturing and infrastructure, which are vital for steel consumption. The stock has the potential to move towards Rs 140-150 mark, with a recommended stop loss range between Rs 115-120 to limit potential downside risks."
 

Amarjeet Maurya, Deputy Vice President- Fundamental Research, Kotak Securities said has a sell call on the stock. 

"During Q4FY25, we estimate standalone steel realizations to increase by 0.7% qoq (-7.5% yoy) on account of improvement in HRC prices. We expect standalone volumes to increase by 3.6% yoy (+6.2% qoq) to 5.6 mn tons. India EBITDA/ton to increase by 13% qoq(-14% yoy) to Rs 12,763/ton led by better flat realisations and lower coking coal costs. On the International front, we estimate Europe to report EBITDA loss of US$39/ton (-US$42/ton in Q3FY25) due to a combination of breakeven at Dutch operations and continued losses in UK operations during transition period. We expect lower raw material costs should aid margins. Losses in Europe are likely to continue, and decarbonization capex should keep dragging cash flows. We remain cautious about the metals space due to the escalating trade war between the US and China, with consequent demand destruction fears. Recent safeguard duty recommendations on flat steel products may protect domestic focused players from imports. We have Sell rating with Target Price Rs 120," said Maurya. 

A R Ramachandran, SEBI registered Independent analyst said, "Tata Steel stock price is bearish and oversold on the daily charts with strong resistance at Rs 139. A daily close below the support of Rs 125 could  lead to a target of Rs 117 in the near term."

Meanwhile, Sensex and Nifty crashed on Monday in line with global peers. Sensex crashed 3,000 pts to 72,354 and Nifty fell 971 pts to 21,933 in the current session. Investors lost Rs 19 lakh crore in early deals as Sensex and Nifty for the second straight session today.