BSE Metal index up over 4% led by Coal India

Metal shares have firmed up on hopes that clearance of infrastructure projects by the new government would lead to revival in demand

The BSE Metal index is the top gainer among the sectoral indices on the BSE, up around 5%, on hopes that the new government's likely clearance for stalled infrastructure projects would lead to a pick-up in demand, going forward.

While measuring underlying earnings' ability on expectations of commodity prices, we have raised target multiples on a higher risk appetite for high-beta Indian stocks on potential regime change and improved policy making outlook, Geojit BNP Paribas said in a note.

State-owned Coal India is the top gainer in the BSE Metal Index, up 7% at Rs 371. According to a report by a foreign brokerage, reform of Coal India would be on the agenda of the new government. The company will announce its results for the year ended March 31, 2014 on May 29, 2014.

Sesa Sterlite is up 6% at Rs 228. According to technical analysts, the stock is poised for further gains from current levels. "Sesa Sterlite has confirmed breakout from Bullish Inverted head and shoulder kind of pattern. Its momentum Indicators are in BUY mode. One can BUY at current market price with stop loss of Rs 200 for a target of Rs 245 in the short term," says Devang Shah, Portfolio Manager- PRO TECH-PMS at Sharekhan.

Other gainers include SAIL, Hindalco, JSW Steel, Jindal Steel, Tata Steel and Hindustan Zinc, up 1.6-6% each, on the BSE.