Nifty Metal index climbs 1.8%; Tata Steel, Nalco, Hindalco shares lead gains on positive global cues

Steel, metals shares rally

The Nifty Metal index rose 1.8 percent to 10,273.15 by 10:30 am on Friday, lifted by strong gains in Tata Steel, National Aluminium Company and Hindalco shares. The advance came as global cues turned supportive for capital-intensive sectors such as steel, with expectations of a U.S. Federal Reserve rate cut this month and the European Union’s plan to raise tariffs on imports drawing focus.

Tata Steel stock gained 3.4 percent to Rs 173.26, while National Aluminium Company (Nalco) added 3.5 percent to Rs 221.89. Hindalco rose 2.2 percent to Rs 782.95. Vedanta and SAIL also traded higher, up 1.7 percent and 1.5 percent respectively. Among other notable movers, Jindal Stainless advanced nearly 3 percent.

JSW Steel was up 1.2 percent at Rs 1,160, after Moody’s changed the company’s rating outlook to positive from stable while affirming its Ba1 senior unsecured rating. “The outlook change to positive reflects JSW Steel's meaningful expansion in operating scale...,” Hui Ting Sim, assistant vice president and analyst at Moody’s Ratings, said in a press release issued on Wednesday.

Hindustan Copper rose 1.2 percent, extending its 45 percent jump over the past 30 days. On the downside, Jindal Steel was the only significant laggard, slipping 1.2 percent to Rs 1,052.30, while APL Apollo was flat.

Global policy developments are in focus. Traders are pricing in a near-certain 25 basis-point rate cut by the U.S. Federal Reserve this month, which typically boosts demand outlook for capital goods and metals. Meanwhile, the European Union is preparing to hike steel import tariffs to 50 percent and nearly halve quota levels.

While the measures are designed to shield European producers, ICICI Direct noted the impact on Indian steelmakers such as Tata Steel and SAIL is likely to be minimal given exports account for less than 8 percent of their sales, according a report in the Informist. Tata Steel could even benefit, with its Netherlands operations contributing around a quarter of consolidated revenue.

By turnover, Tata Steel was the most active metal stock with Rs 357 crore worth of shares traded, followed by Hindustan Copper at Rs 246 crore and National Aluminium at Rs 237 crore.

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