 "The shares of aluminium manufacturers rallied on Monday on the back of a sharp rise in the price of the lightweight metal over the weekend, following China's announcement that it will withdraw export tax rebate for the commodity.")
Metal stocks glittered in trade and gained up to 5 per cent on Wednesday, May 14, 2025. The Nifty Metal index, which tracks the performance of the metal and mining sector in India, rose 2.8 per cent, registering the day's high at 9,085.05.
At 10:09 AM, all 15 constituents on the Nifty Metal traded positive. Among others, Tata Steel stock was the top gainer rising over 4 per cent, followed by Lloyds Metal and Energy gained 4.16 per cent, National Aluminium Company rose 4.14 per cent. Jindal Stainless and Steel Authority of India (SAIl) was up over 3 per cent. NMDC, Hindalco, Vedanta, Jindal Steel, and Power were up over 2 per cent. READ STOCK MARKET UPDATES TODAY LIVE
Why are investors buying metal stocks?
According to analysts, metal stocks are rising amid easing trade tensions between the US and China.
"Metal index is on its upward trajectory as geopolitical tensions have been de-escalating and also, the trade negotiations between US and China are going in a very positive direction," said Kranti Bathini, Director - equity strategy, WealthMills Securities.
He added: Nifty Metal was in a consolidation phase recently.
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Echoing a similar view, independent market expert Ambareesh Baliga said that fear of dumping metal stocks is out as trade war worries are softening. Additionally, according to reports, financial institutions are rethinking their China calls after a trade truce and have lifted China's growth outlook which has also boosted sentiments. ALSO READ | KPI Green Energy soars 8% as Q4 profit doubles; stock up 28% in 3 days
Why are metal stocks volatile since the US-China trade deal on Monday?
The US and China reached a temporary 90-day truce on tariffs earlier this week. Under the deal, the US will reduce recent tariffs on Chinese imports from 145 per cent to 30 per cent, while China will lower its duties on US goods from 125 per cent to 10 per cent.
On Monday, Nifty Metal gained over 5 per cent on the back of US-China trade deal development. However, it slipped nearly 1 per cent on Tuesday.
The rise in metal stocks today is due to a 'lag effect', according to Bathini.
A 'lag effect' in the stock market refers to a delay between a cause and its observable impact on stock prices. This can happen as traders and investors may have some other better bet than a specific sector. ALSO READ | Why did Bharti Hexacom share price hit record high on May 14? Details here
US-China trade tariff details
Since returning to the White House in January, US President Donald Trump launched a flurry of aggressive trade measures that jolted financial markets and ratcheted up recession fears. The duties, which are designed to narrow the US trade deficit, hit China particularly hard.
Trump had imposed tariffs of up to 145 per cent on Chinese imports, prompting Beijing to respond with retaliatory curbs of its own, including restrictions on some rare earth elements.
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