Stimulus Boost for Metal Stocks:
Tata Steel and other metal stocks saw a surge after China announced stimulus measures to boost its struggling economy. The People’s Bank of China (PBOC) cut the reserve requirement ratio (RRR) by 50 basis points, releasing more cash into the financial system. This move helped elevate global sentiment.
Economic Stimulus from China:
In addition to cutting the RRR, the PBOC reduced the seven-day reverse repurchase rate from 1.7% to 1.5%. The slowdown in the Chinese economy had previously reduced demand for metals, leading Chinese steel manufacturers to sell products at lower prices globally, impacting Indian steel companies.
Also Read: Best Metal Stocks In India
Impact on Indian Steel Stocks:
The stimulus announcement had a positive effect on Indian steel stocks. The Nifty Metal index rose by 2%, becoming the best-performing sector on Tuesday. Indian steel companies had been struggling with weak steel prices, but the new developments brought optimism to the sector.
Stock Performance Details:
Shares of Tata Steel rose 3.31% to ₹159.08, NMDC gained 3.78% to ₹223.53, and Hindalco Industries saw a 1.79% increase to ₹702.90. National Aluminium Company surged 5.19% to ₹189.60, while Steel Authority of India gained 3.45% to ₹134.16.
Broader Market Reaction:
Vedanta’s shares also increased by 2.90%, closing at ₹466.25. The positive movement in these metal stocks reflects renewed investor confidence, thanks to the Chinese government’s efforts to stabilise its economy and boost demand, which will likely impact the global steel market favourably.
