27 Dec , 2022 By : Monika Singh
As China begins lifting its zero-Covid policy, Indian shares rallied buoyed by the metals pack. With the hopes of a revival in demand in China, the Nifty Metal index rose 4.23% in trade on Tuesday, extending its rally for the second consecutive session. Increased domestic expenditure on infrastructure and optimistic Q3FY23 expectations are also fuelling the sector’s rally. Jindal Steel & Power, Welspun Corp and National Aluminum Company are the top gainers in the index.
“The Ministry Of Steel has taken recent initiatives for the growth of the steel sector. Decarbonization in the steel sector is a key driving factor in the metals sector”, said Rameshver Dongre, Research Analyst – Equity Research, CapitalVia, adding, “Overall trend of the Nifty Metal index is bullish on the long term chart. After a correction, the index has marked the support of 6200 and resumed the up trend.” However, despite the bullish charts, Jatin Damania, Research Analyst, PCG Research, Kotak Securities said that steel stocks offer unattractive risk-reward after the recent rally.
“Investors should focus on Jindal Steel & Power, JSW Steel and JSL. These are bullish on the long term chart and approaching their 52 week high prices. Apart from that, technically, we are seeing positive momentum as stocks are forming Continuous pattern on the charts, said Rameshver Dongre, CapitalVia. “NMDC is our preferred play in the Indian ferrous space given attractive valuations and near-term trigger of price hikes,” said Jatin Damania, Kotak Securities.
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