ALSO READMetal shares extend fall; Nifty Metal index down 4% in two days Metal shares gain; Vedanta hits 52-week high, Tata Steel up 5% intraday Markets end at lowest level since November 24; metal stocks melt Sensex rallies over 400 points; Tata Steel, Tata Motors gain over 4% Markets ended the day lower ahead of exit polls; Metal stocks melt
At 12:57 pm; Nifty Metal index and S&P BSE Metal index, the largest gainers among sectoral indices, were up 3.6% as compared to 0.7% rise in the Nifty 50 and Sensex.
Tata Steel, Hindalco Industries and Vedanta were up 5%, while Steel Authority of India (SAIL), Hindustan Zinc, JSW Steel and Jindal Steel and Power were up in the range of 2% to 4% on the NSE.
Tata Steel rallied 6% to its 52-week high of Rs 514 on BSE. Since May 16, in past eight trading sessions, the stock gain 12% after the company reported a healthy set of Q4FY17 numbers driven by significantly higher EBITDA/tonne from both Indian as well as European operations.
“India to be the fastest-growing large steel market globally in 2016 through 2018, given limited capacity additions over the next few years, expecting the local demand supply balance to tighten further”, analysts at JP Morgan said in recent report.
While India currently has anti-dumping duties in place, it would need to incentivize the domestic industry to add capacity, and eventually would need imports. India’s steel demand growth is not cyclical but structural; hence demand-supply tightness should increase further over the coming years, in our view. We highlight that India’s construction activity has been muted for over four years now, hence a pick-up would mean that there is upside risks to demand forecasts, added report.
Analyst at Edelweiss Securities expects non-ferrous companies to sustain earnings momentum on higher base metal prices and operating leverage benefits.
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