Metal equities have been buzzing on the trading floors for quite some time now. The Nifty Metal index, the gauge of metal companies, has surged 40 per cent over the past six months, eclipsing the Nifty 50 index's comparatively modest 15.6 per cent ascent.
Individually, Hindustan Copper stock has soared 155.4 per cent, while stocks of Jindal Steel and Power, Hindustan Zinc, NMDC, Vedanta, Steel Authority of India (SAIL), and National Aluminium Company (Nalco) have rallied between 50 per cent and 93 per cent during the period.
In calendar year 2024 (CY24), the index has gained 16 per cent as compared to a 3 per cent gain in the frontline benchmark Nifty 50 during the period.
Given the limited scope of price rise across categories, analysts suggest investors dabble into the metal pack selectively, and on dips.
At the fundamental level, the run-up in the stock prices, analysts said, has largely been driven by tighter supplies in the global markets, coupled with hopes of improving demand, especially in China. activity across the US, Germany, and the UK is further driving metal demand globally, he added.
Meanwhile, supplies have remained tight due to muted production, crisis in the Red Sea, and the ban of Russian Metal on London Metal Exchange (LME).
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