Shares of AK Steel Melt in the Face of Stronger Dollar

The share prices of K Steel went down as the US Dollar got stronger and investors made big sales, according to the analysts at Soleil.  

On Tuesday, share prices of AK Steel Holding Corp. dropped by as much as 3 percent.  Analysts said the drop in AK share prices was caused primarily by the continued strong showing of the US Dollar.  A strong buck would mean trouble for commodity goods as investors will flee from them.  Analysts also said that the current stock sales activities of market investors also triggered the drop.  

86 Cents Lower

As the market closed for the day, the shares of AK Steel, a company based in Pittsburgh, was down by 86 cents.  This is translated into a broad 2.7 percent decrease of share prices.  AK shares were pegged at $30.96 at the close after experiencing a fresh one year low of $28.81 earlier in the trading session.

Charles Bradford market analyst at the Soleil Securities Group said several factors could have triggered the drop in share prices of AK Steel.  In a recent telephone interview with Bradford, he said that the main reason could be the sudden surge of strength of the US currency.  

When the US Dollar was weaker on previous trading sessions, the steel industry experienced a windfall from international selling of steel especially in growth areas such as the Chinese Mainland.  A weak US Dollar helped fuel the international sales of durable goods companies such as AK Steel Holdings.

Harbinger Brings Woe to AK Stocks

According to Bradford, the market may have also reacted negatively to the recent move Harbinger Capital Partners.  Harbinger sold big blocks of AK stocks.  The hedge fund once owned 10 percent stake at AK Steel.  Earlier this month however, Harbinger lowered its shares to just about 4 percent.  

Bradford also said that the shares of AK Steel are acting as if there are still big sellers around.

On a final note, the stocks of AK Steel was recently boosted by stories that a take over was in the offing.  At the end of July, AK Steel share shot up amid reports that a Russian steelmaker company is set to buy the Pittsburgh Company.  At that day, shares of AK Steel jumped to $63.50.  It has lost more than 50 percent of its value however when deals failed to materialize.

Bradford however stressed that investors should not worry too much about AK Steel.  He said that the corporate fundamentals as well as the health of AK Steel’s economic base are still stable.  Bradford emphasized that AK Steel is still on solid footing and investors can ease their jitters about the company.

Bradford said that despite the stock drops, there is nothing in the company's fundamental business health that would prompt investor worry.