Tata Steel, SAIL, other steel stocks surge up to 4% after China announces plans to cut steel output

The strong rise in steel stocks fueled the rally in Nifty metal index, which was up nearly 3 percent to 8,589.20

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The shares of steel stocks surged significantly on March 5 after China announced that it would restructure its steel industry to cut its total output. The latest move by China is expected to reduce the dumping of cheap steel into the Indian market, which would act as a major positive to the domestic steel companies.

The shares of Welspun Corp jumped over 4 percent to trade at Rs 739 apiece. The stock is significantly higher than its 52-week low of Rs 440, which it had hit in June last year. However, it has seen a significant downturn from its 52-week high of Rs 835, which it had hit in January this year.

The shares of Jindal Stainless Steel meanwhile jumped nearly 4 percent to trade at Rs 615.45 apiece. The stock has seen strong rise from its 52-week low of Rs 568.05 apiece, which it had hit in February this year.

APL Apollo Tubes shares jumped over 3 percent, while those of Steel Authority of India (SAIL) and Jindal Steel were up over 2 percent. JSW Steel shares also gained over 2 percent to trade at Rs 996.95 apiece.

Heavyweight Tata Steel surged nearly 3 percent to trade at Rs 143.41 per share. The stock has strongly recovered from its 52-week low of Rs 122.62 which it had hit in January this year.

The strong rise in steel stocks fueled the rally in Nifty metal index, which was up nearly 3 percent to 8,589.20. The rise in Tata Steel's share price was the top contributor to the rally in the index.

Notably, Indian steel companies have been long asking for anti-dumping policy from the central government, to cushion themselves from the impact of cheap steel imports from countries like China. Earlier in February, TV Narendran, the CEO and Managing Director of Tata Steel, said that the centre is addressing the concerns of domestic steel manufacturers over cheaper imports of steel products, and 'some development' in this regard is expected very soon.

Indian Steel Association (ISA) has already filed application with the Directorate General of Trade Remedies (DGTR) in this regard which is reviewing it.

Notably, the rise in steel stocks comes amid a general market upturn. Sensex and Nifty surged to jump into the green territory, taking a breather from the incessant selloff over the past several weeks.