Nifty Metal extends rally as base metal prices rise globally, index tops 1%; Coal India, Tata Steel, JSW Steel drive

A broad-based buying was recorded in the Nifty Metal index.

May 28, 2021 12:05 IST India Infoline News Service

Metal company stocks further extended their rally on Friday as base metal prices in Shanghai and London rose after solid US job data that signalled a recovery in employment as the economy reopens from the pandemic. This week, metal stocks have been in a volatile session after Credit Suisse has downgraded the sector as various risks emerge on the prices ahead. A broad-based buying was recorded in the Nifty Metal index.

At around 12.46 PM, the Nifty Metal was trading at 5,098.85 up 55.55 points or 1.10%. The index touched an intraday high of 5,188.55.

MOIL was the top gainer soaring 3.3%, while Coal India and JSW Steel advanced by 2% and 1.9% respectively. Tata Steel and JSPL zoomed by 1.8% and 1.5%.

Stocks like Vedanta, NMDC and Hindalco gained more than 1% each. Welspun Corp jumped by 0.8%.

Ratnamani, Hindustan Zinc and APL Apollo were marginally up.

On the contrary, Adani Enterprises was the top underperformer tumbling 1.6%, while NALCO and SAIL plunged marginally.

In its research note, Credit Suisse downgraded the sector to underweight and said that the rise in global steel price may have run its course. The Swiss financial services company pointed out risk factors like - easing supply chain shocks, weakening demand in China and the country's efforts to curb speculation in commodity prices.

On Thursday, according to the data, American filing new claims for unemployment benefits has plunged to its lowest since mid-March 2020, as companies require workers to meet the surging demand unravelled by a speedily reopening economy.

Globally, investors are betting on the US to lead the world out of the Coronavirus pandemic as the focus has shifted to a multi-trillion-dollar spending boost by the Joe Biden administration.

Overnight, at the Shanghai Future Exchange, Copper settled higher by 3.05%, zinc climbed 1.1%, aluminium jumped 1.11%, nickel surged 3.98%, lead soared 1.11% and tin skyrocketed 4.97%.

Meanwhile, at the London Metal Exchange, Copper closed higher by 3.37%, aluminium rose 3.02%, zinc grew 2.77%, the lead went up 0.8%, nickel strengthened 4.19% and tin advanced 1.58%.

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