Shares of metal companies traded among the top gainers on Thursday's session, with NSE metal index rising 2.68%, backed by strong domestic and international cues.
The government's announcement to spend on infrastructure helped witness buoyancy in metal scrips, while media reports suggesting a hike in steel prices by Rs 1000 per tonne added to the upward move for steel stocks. This, coupled with companies reporting decent sales figures for December quarter contributed towards the surge stocks of steel sector.
FM Sitharaman's unveiling of Rs 102 lakh crore-National Infrastructure Pipeline (NIP) to make India a $5 trillion economy by 2025 was a bullish sentiment for the sector, as increased demand for these projects is expected to drive steel demand.
Additionally, encouraging sales figures for December quarter by listed companies such as JSPL, SAIL, Steel Strips helped build bullish momentum. Shares of Steel Authority of India Ltd (SAIL) rose 10% intraday on clocking volume growth of 47%.
SAIL said it achieved the highest ever monthly sales during December. JSPL, too rose 4.75% on recording 30% volume growth, the highest ever quarterly domestic production of crude steel in Q3FY20. Steel Strips Wheels too gained over 1% on reporting 6% volume growth on December sales.
Meanwhile, shares of Tata Steel rose 4.28% intraday, while JSW Steel stock climbed 3.34%. Other metal stocks too turned bullish today, with Hindustan Copper surging 20%, followed by 6% rise in National Aluminium shares.
Shares of companies from the 'iron & steel interim products' sector also surged over reports of hike in pellet prices from Rs 5,800/tonne to Rs 6,400/tonne over last 1-2 months to Rs 7,000/tonne currently. Shares of Surya Roshni and Prakash Industries rose 20% today, followed by Sarda Energy and Minerals and Tata Steel Long Products shares, that rose 14% each. Godawari Power & Ispat shares climbed 12.21%, followed by Tata Meta links that surged 7.63% intraday.
As raw material prices move in line with steel prices, rally in steel stocks was accompanied by a surge in 'mining' sector stocks, with MOIL gaining 8.5% intraday, followed by 2.5% rise in NMDC shares.
Further US President Donald Trump's announcement of signing Phase-1 trade deal with China on January 15 enthused investors amid the ongoing Brexit deal optimism.
By Rupa Burman Roy