Metal Stocks: The metal sector in the Indian stock market has emerged with a tremendous rise this week. The Nifty Metal Index has climbed about 10% so far this week, which is a sign of widespread rise in the sector. In the first 4 days of this week, major stocks like NALCO, JSPL, SAIL, Jindal Stainless and Tata Steel have seen a strength of 12% to 14%. At the same time, the weakest performing stock Hindalco in the index has also been 5.5% above.
Let us know what is the reason for the boom in metal stocks and what is going to happen next.
1. America-China Trade Agreement:
The news of a possible trade agreement between the US and China has improved global risk spirit. Psychological sectors like metal have been directly benefited by this, as investors have shown interest in these areas again.
2. Tata Steel’s positive guidance:
Tata Steel has given positive guidance on demand outlook and margin stability. This has increased the trust of investors in the domestic steel sector. This further strengthened the sentiments of the sector.
3. Rotational trading and risk-on mood:
The broker market has been in the ‘Risk-on’ mood this week, which provided widespread support to metal and industrial shares.
What was the reason for the rise in aluminum shares?
One of the major reasons for rapid aluminum shares is a sharp jump in the prices of alumina. According to reports, the Guinea government is considering cancellation of mining license of Emirates Global Aluminum (EGA). In 2024, EGA exported about 10.8 million tonnes of bauxite, which supports about 3.5 million tonnes of alumina production.
If this license is canceled, the supply of alumina in short -term may be affected. This fears have increased pre-hinge and speculative trading. Due to this, alumina prices have climbed more than 10% compared to the low -lying levels of April.
NALCO will get the most benefit
A large part of the income of National Aluminum Company (NALCO) comes from alumina sales. Bounce in existing prices can improve the company’s margin, causing further strengthening of its stock in the near future.
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