Shares of metal companies were trading higher for the second straight day on Monday, with Nifty Metal index advancing 6 per cent since Thursday, on report that US and China could sign the interim trade deal in November, which would trigger better prospects for Global growth.
At 10:56 am, the index was the largest gainer among key sectoral indices, up 4 per cent, as compared to a 0.55 per cent rise in the Nifty50 index.
Among individual stocks, Jindal Steel & Power (JSPL), JSW Steel, Steel Authority of India (SAIL) and Tata Steel were up more than 5 per cent each, while Vedanta, Hindalco Industries, Hindustan Zinc and National Aluminium Company from the Nifty Metal index were trading higher in the range of 3 to 5 per cent on the NSE.
According to a Bloomberg report, US President Donald Trump said he was exploring several locations to sign the first phase of a trade agreement with China, including Iowa. CLICK HERE TO READ FULL REPORT
According to analysts at Edelweiss Securities, the worst might be over for ferrous stocks amid relatively favorable macroeconomic situation. The brokerage firm believes JSPL stands out due to its niche offerings such as rails and specialty plates that are price inelastic (although half of its products are susceptible to lower pricing).
Meanwhile, Mishra Dhatu Nigam (MIDHANI) hit an all-time high of Rs 179, up 10 per cent today. The stock of the state-owned iron & steel products company has soared 23 per cent in two days after it reported a 75 per cent year on year (YoY) jump in net profit at Rs 36 crore in September quarter (Q2FY20). The company’s profit before tax (PBT) rose 62 per cent at Rs 52 crore on YoY basis.
The stabilisation of 15OOT forge press and other recent capital investments coupled with a healthy order booking, particularly from space sector, has enabled the MIDHANI to achieve 48 per cent YoY growth in a net turnover of Rs 170 crore in Q2FY20. As on October 1, 2019, the company has order book position of Rs 1,776 crore.