Indian benchmark indices gained nearly 2 percent mainly supported by the rally seen in the metal names. The Sensex was up 889.93 points, or 1.82 percent, at 49,898.43 and the Nifty was up 267.60 points, or 1.84 percent, at 14,774.90.
The Nifty metal index rose 3 percent led by the MOIL, SAIL, Tata Steel, Jindal Steel and JSW Steel, which gained 4-8 percent. NMDC, APL Apollo, Hindustan Copper, Coal India and NALCO were among the other major gainers.
The recent rally has more steam and may see further upside in the steel stocks as risk-reward remains favourable, research house CLSA said.
It maintained "buy" on Tata Steel and raised the target to Rs 950 from Rs 860. It upgraded JSW Steel to "outperform" from "sell" and raised the target to Rs 490 from Rs 350.
The estimates imply Rs 10,000-12,000/t correction in steel prices versus spot, however, a sharp correction is unlikely unless demand drops sharply, CLSA said.
It raised the estimates for Indian steel companies mainly on better realisations, CNBC-TV18 reported the research house as saying.Disclaimer: The above report is compiled from information available on public platforms.Moneycontrol.com advises users to check with certified experts before taking any investment decisions.