Metal Stocks Surge on China's Pro-Growth Policies and US Rate Cut

Metal Companies See Significant Gains

Metal companies' shares saw a significant surge in trading on December 12, with the Nifty Metal index rising over 2 percent to 10,478. This marks the third consecutive session of gains for the sector.

China's Pro-Growth Policies Boost Investor Sentiment

Chinese leaders have announced plans to maintain a proactive fiscal policy in the coming year, aiming to stimulate consumption and investment to support high economic growth. This move is expected to ease concerns over the slowdown in China's economy and have a positive impact on metal demand and pricing, given China's position as the top producer and consumer of metals.

US Dollar Weakness and Fed Rate Cut Support Metal Stocks

The US dollar has been weakening against major currencies like the Euro and Japanese Yen following the US Federal Reserve's decision to cut interest rates by 25 basis points. This rate cut, which brings the rate to a range of 3.5 to 3.75 percent, is expected to reduce borrowing costs for foreign investors, making higher growth markets in India more attractive. The weakness of the US dollar and the Fed's rate cut are also supporting the prices of metal stocks.

Key Gainers in the Metal Sector

Several metal companies saw significant gains, including:

• Hindustan Copper, which rose over 6 percent to trade at Rs 379.65 per share
• Hindustan Zinc, which increased by over 5 percent
• National Aluminium Company (NALCO), which saw a rise of over 4 percent
• Tata Steel, which gained nearly 3 percent after unveiling major capital expenditure plans, including the expansion of long steel products capacity and the establishment of a new rolling mill in Odisha

Other gainers in the sector included Hindalco Industries, Vedanta, Steel Authority of India (SAIL), NMDC, JSW Steel, Jindal Stainless Steel, Jindal Steel & Power, and APL Apollo Tubes, with Adani Enterprises also trading in the green with marginal gains.

This surge in metal stocks is closely tied to market trends and industry terms such as metal demand, pro-growth policies, interest rates, and currency exchange rates, making it an important development for investors and market watchers.