scorecardresearchNifty Metal index records fresh 52-week high as Jefferies changes stance to ‘positive’

Nifty Metal index records fresh 52-week high as Jefferies changes stance to ‘positive’

Updated: 02 Jan 2023, 04:47 PM IST
TL;DR.
  • Jefferies has changed its stance on Indian metal companies from ‘cautious’ to ‘positive’ after almost a year.
Nifty Metal Index gains over 2% in today's trading session.

Nifty Metal Index gains over 2% in today's trading session.

The Nifty Metal index outperformed the benchmark index and other Nifty sectorial indices on the first trading session of 2023, setting a new 52-week high. After a sharp decline last week, the metal index saw renewed interest in buying with gains of over 2 percent.

The optimistic outlook on the Indian metal industry provided by investment bank and financial services firm Jefferies contributed to the positive sentiment.

Jefferies has changed its stance on Indian metal companies from ‘cautious’ to ‘positive’ after almost a year.

" China has started to ease Covid policy and support its ailing property sector. We believe worst-margin quarter for Indian steel, and the big chunk of earnings cuts for Tata Steel and Hindalco are behind," said Jefferies in its report.

The global brokerage has upgraded Tata Steel Ltd and Hindalco Ltd's rating to 'buy' from 'hold'. Its top pick is Tata Steel followed by Hindalco.

"We believe a sequential improvement in quarterly earnings before interest, taxes, depreciation, and amortisation (EBITDA) trend for Tata Steel and Hindalco in 2023 will help drive stock performance," added the brokerage.

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Nifty Metal Index

In today's trading session, the Nifty Metal index also recorded a new 10-year high. However, analysts say it is likely to turn volatile, and stocks specific rally is possible. The 7,000 level is likely to occur soon, they say.

Among the top contributors today were Steel Authority of India, Hindustan Copper, Tata Steel, Jindal Stainless, and MOIL, which gained 4-7 percent. Adani Enterprises was the only laggard among the metal pack.

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Commodity prices and stock market
First Published: 02 Jan 2023, 04:47 PM IST