Metal stocks rose on Tuesday following the increase of global coking coal prices from $92/tonne in Q2FY17 to $200/tonne in Q3FY17, which led to the Nifty50 to reclaim 8,250 mark after two months, on January 10.
Metal stocks rose on Tuesday following the increase of global coking coal prices from $92/tonne in Q2FY17 to $200/tonne in Q3FY17, which led to the Nifty50 to reclaim 8,250 mark after two months, on January 10. NIFTY Metal index closed at 2,833.90, up by 1.4%.
“In Q3FY17, Indian steelmakers will enjoy some cushion from sharp increase in imported coking coal costs led by carry-over low priced inventories. Higher base metal prices will aid improvement in earnings of non-ferrous names in Q3FY17— zinc & lead prices increased the most by 12-14% q-o-q while aluminum prices increased by 6% q-o-q,” said a Kotak report published on January 10.
Stock price of Hindalco Industries, a subsidiary of Aditya Birla group, shot up by 4.5% intraday and closed at Rs 165.05 on Tuesday on NSE.
“Aluminium major Hindalco Industries remained our top pick in the metals and mining sector. We have reiterated buy rating on the stock and valued at Rs 234, implying 48% upside,” said a Motilal Oswal report published on January 9.
Tata Steel shares rallied by 2.4% before closing at Rs 431.90 on January 10. The market cap of Tata steel swelled by Rs 20,692 crore in last 11 months to touch Rs 41,850 crore on Tuesday.
JSW Steel, the company engaged in the production and distribution of iron and steel products advanced by 1.6% and closed at Rs 178.80. JSW Steel recently informed BSE in a filing that it has registered a 43% growth in crude steel production at 3.86 million tonnes in the third quarter of the current fiscal.
While the share price of Tata steel nearly doubled from its February low of Rs 217.85, Hindalco and Jindal Steel saw their share prices gaining 169% and 83% respectively during the same period. Metal stocks bounced back in 2016, with a gain of 47% after six years of under performance.