Metal stocks such as Tata Steel, Jindal Steel, SAIL and JSW Steel advanced up to 9.5 per cent on the NSE on Tuesday on reports government could allow integrated steel producers to divert a portion of iron ore from their captive mines for use by other joint venture entities. That apart, optimism around US-China trade deal also boosted investor sentiment.
"As per the new reform initiative proposed for mining, the Centre would permit steel producers to use an identified portion of iron ore from their captive mines allotted prior to the auction regime for use by any other of their entities or joint venture operations. In case of a JV, the original lessee of the mine (the company that was originally allotted the captive mine) should at least hold 26 per cent equity," news agency IANS reported.
Individually, shares of Tata Steel (up 9.5 per cent), JSW Steel (up 8.3 per cent), SAIL (up 5.8 per cent), NMDC (up 8.8 per cent), and Vadanta (up 5.4 per cent) outperformed the benchmark indices in the intra-day trade. The S&P BSE Sensex gained up to 1.46 per cent, the broader Nifty50 up to 1.36 per cent, and the Nifty Metal index gained up to 4.2 per cent in the intra-day trade today. Out of 15 constituents on the Nifty Metal index, 14 were trading in the green, with an exception of APL Apollo Tubes.
Besides, ease in trade tensions between the United States and China lifted market sentiment. US President Donald Trump said on Monday he expected to sign a significant part of the trade deal with China ahead of schedule, while Washington could also consider delaying tariffs on $250 billion in Chinese goods (originally slated for December). Trump, however, did not elaborate on the date of signing the deal. READ MORE
Early this month, Washington and Beijing agreed to reach "Phase 1" of the trade deal to end nearly 16-month long trade tussle.
Metals have traded range-bound as fears of an accelerated trade war between the world's two largest economies dented consumption sentiment. With China being the world’s top consumer of industrial metals, prices have fallen sharply since the trade war began, with copper down more than 20 per cent from a June 2018 peak, news agency Reuters reported.