The Nifty Metal index led sectoral gains on April 9, soaring nearly 2% amid a resurgence in global manufacturing activity. Both China and the US witnessed significant upticks in manufacturing, bolstering confidence in metal stocks.
In the US, the manufacturing sector expanded for the first time in 18 months, with the ISM reporting a surge in the manufacturing Purchasing Managers’ Index (PMI) to 50.3 in March, up from 47.8 in February, marking the highest reading since September 2022.
Similarly, China’s manufacturing activity also expanded in March for the first time since September, signaling economic stabilization in the world’s second-largest economy. While the property sector crisis remains a concern, the data provided relief to policymakers.
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China’s Purchasing Managers’ Index (PMI) climbed to 50.8 in March from 49.1 in February, surpassing the Reuters poll forecast of 49.9. This is noteworthy as China is the largest consumer of metals, highlighting the positive impact on metal stocks amid the global manufacturing revival.
Recent data released on April 8 showcased a remarkable surge in German industrial production, with a notable increase of 2.1 percent in March, surpassing the earlier Reuters estimate of a 0.3 percent rise. The Federal Statistics Office attributed this growth to the robust performance of the construction sector.
Over the past year, the Nifty Metal index has demonstrated significant strength, registering a remarkable 60 percent surge, outpacing the 30 percent gain observed in the broader Nifty 50 index.
On April 9, Hindustan Zinc emerged as the top gainer on the Nifty Metal index, recording a substantial 9 percent increase in trading value to reach Rs 377. Following closely behind, Hindustan Copper observed an 8 percent surge, trading at Rs 356.
Ajit Mishra, SVP – Technical Research at Religare Broking Ltd., anticipates further positive movement for companies such as Steel Authority of India Ltd, Tata Steel Ltd, National Aluminium Company Ltd, and Vedanta Ltd, projecting a potential upside of 5-10 percent.
Moreover, specific company developments alongside the overall manufacturing activity have contributed to the gains witnessed in select metal stocks on April 9, as noted by Mishra.
Sources: moneycontrol.com
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