Shares of metal companies surged as much as 5 percent on September 24 after China's central bank announced a slew of measures to boost its ailing economy. The country has been long suffering from a property sector debt crisis, youth unemployment, and faltering demand.
Sharp gains in metal names lifted the Nifty Metal index 1.5 percent higher, with stocks like NALCO and NMDC leading the pack with a 5 percent upmove.
The People's Bank of China (PBOC) introduced key initiatives, including plans to lower the reserve requirement ratio, reduce the policy interest rate, and drive down the market benchmark interest rate to stimulate growth.
On Tuesday, central bank that it would cut a slew of rates in a bid to boost growth. "The reserve requirement ratio will be cut by 0.5 percentage points in the near future," PBOC chief Pan Gongsheng told a news conference in Beijing. This bolder-than-expected move by the Chinese central bank is expected to inject around a trillion yuan in "long-term liquidity" into the financial market.
Follow our market blog to catch all the live action
In addition, the central bank also plans to reduce interest rates on existing mortgages and standardize down payment ratios to further bolster demand in the property sector, which has traditionally accounted for over a quarter of China's GDP.
However, the sector has faced immense pressure since 2020 when authorities restricted credit access to developers in an effort to control rising debt. As a result, major players like China Evergrande and Country Garden have struggled, while falling property prices have discouraged consumer investments, leading to a drop in metal demand from the world's largest importer.
The announcement of these economic measures has sparked optimism for a recovery, especially benefiting metal stocks that depend on a demand rebound in the world's largest importer.
Other metal stocks like MOIL, SAIL, Tata Steel, Jindal Steel Vedanta, Hindalco, JSW Steel, and Hind Zinc also gained 1-3 percent.
Meanwhile, 54.2 lakh shares of Tata Steel also changed hands in three block deals on the exchanges today, the buyers and sellers of which could not be identified immediately.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
