Metal shares in focus; Nifty Metal index at eight month high
In past two months, Nifty Metal index zoomed 24% as compared to nearly 10% rise in the Nifty 50.
 "Metal shares in focus; Nifty Metal index at eight month high")
Shares of metal companies are continued trading higher on the bourses on expectation of improvement in earnings and margins on a sequential basis for the quarter ended March 2016 (Q4FY16).
Vedanta has rallied 7% to Rs 105, followed by Jindal Steel & Power (6% at Rs 74), Hindustan Zinc (5% at Rs 177), Tata Steel was (4.5% at Rs 351) and Hindalco (3.3% at Rs 100) on the National Stock Exchange (NSE).
Vedanta has rallied 7% to Rs 105, followed by Jindal Steel & Power (6% at Rs 74), Hindustan Zinc (5% at Rs 177), Tata Steel was (4.5% at Rs 351) and Hindalco (3.3% at Rs 100) on the National Stock Exchange (NSE).
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At 12:07 pm, Nifty Metal index, the largest gainer among sectoral indices, was up 3.1% at 2,048 as compared to 0.22% decline in the benchmark Nifty 50. The metal index hit an intra-day high of 2,057, its highest level since August 2015.
In past two months, Nifty Metal index zoomed 24% as compared to nearly 10% rise in the benchmark index.
“Q4FY16 is expected to be weak, however with the introduction of minimum import price (MIP) during the quarter and improvement in non-ferrous LME prices (up 1-4% on a qoq basis) coupled with a weaker rupee (down 2.4% qoq) which averaged at Rs 67.5/US$ during the quarter, Q4FY16 is expected to result in improvement in earnings and margins on a sequential basis,” Reliance Securities said in a results preview.
Centrum Broking expect broad-based improvement in earnings and margins (sequential basis) from metals & mining universe, led by marginally better realisations for ferrous producers led by support from MIP, improvement in non-ferrous LME prices coupled with weak rupee, strong volumes across players, and further drop in CoP aided by reducing raw material costs & operational efficiencies.
According to JP Morgan, March 2016 quarter should broadly see most resource companies report q/q improvement, though only marginal. Going forward, while there has been a rebound in commodity prices, earnings visibility is the highest only in steel given a supply cuts in China; and India policy protection.
| Company | 19/02/2016 | 18/04/2016 | LTP | % chg* | % chg# |
| Vedanta | 74.65 | 97.50 | 104.75 | 7.44 | 40.32 |
| Jindal Steel | 57.30 | 69.25 | 73.70 | 6.43 | 28.62 |
| Hindustan Zinc | 164.20 | 168.95 | 176.95 | 4.74 | 7.76 |
| Tata Steel | 253.25 | 335.55 | 350.80 | 4.54 | 38.52 |
| Hindalco Inds. | 69.05 | 97.05 | 100.30 | 3.35 | 45.26 |
| SAIL | 36.15 | 44.55 | 45.50 | 2.13 | 25.86 |
| Ratnamani Metals | 408.55 | 476.70 | 486.00 | 1.95 | 18.96 |
| Bhushan Steel | 34.90 | 37.10 | 37.80 | 1.89 | 8.31 |
| JSW Steel | 1083.50 | 1334.25 | 1358.10 | 1.79 | 25.34 |
| Jindal Saw | 41.40 | 42.95 | 43.55 | 1.40 | 5.19 |
| Nifty 50 | 7210.75 | 7914.70 | 7897.00 | -0.22 | 9.52 |
| Nifty Metal | 1652.90 | 1986.75 | 2048.00 | 3.08 | 23.90 |
| LTP : Last traded price on NSE at 12:07 pm. | |||||
| * change over previous close, # change over February 29. | |||||