Vedanta, Tata Steel to NMDC: Why are metal stocks rising despite weak Indian stock market? EXPLAINED with five reasons

Despite weakness in the Indian stock market for the last three successive sessions, metal stocks remained under the bulls’ radar. Among metal majors, NMDC’s share price surged over 7 per cent in one week, Vedanta’s shares surged around 9 per cent in the last five sessions, and Tata Steel’s share price ascended over 6 per cent in one week. JSW Steel shares registered a nearly 6 per cent rise, whereas Steel Authority of India Limited (SAIL) appreciated over 7.50 per cent in one week.

According to stock market experts, metal stocks ascended despite the sell-off in the Indian stock market due to five crucial reasons: signs of economic recovery in China, rising demand for metals, the Indian government imposing an anti-dumping duty on Chinese steel products, infrastructure projects getting in full swing post-budget 2025, and the RBI monetary policy outcome of reducing therepo rate by 25 bps.

What is fueling metal stocks in India?

On triggers that fueled Indian metal stocks despite weak sentiments on Dalal Street, Seema Srivastava, Senior Research Analyst at SMC Global Securities, said, “Metal stocks are moving upward due to various macro and micro economic factors related to global and Indian factors. Globally, China’s economic recovery, supply chain disruptions, and increased demand for metals have driven up prices. In India, the government’s imposition of anti-dumping duties on Chinese steel products has positively impacted Indian steel stocks.”

The SMC Global Securities expert added, “Increasing demand for steel in India, driven by economic growth and infrastructure development plans, has boosted revenues and profitability for steel companies. Favourable government policies like the National Steel Policy and reduced metal import duties have also supported the industry’s growth.”

On why metal stocks rallied on Friday, Mayank Mundhra, FRM- VP Risk & Head of Research at Abans Group, said, “Indian metal stocks are on a strong rally, driven by the RBI’s 25-bps rate cut on Friday, which has boosted investor confidence. The rate cut has helped interest rate-sensitive sectors, like metals, recover from previous declines. Lower borrowing costs are expected to drive metal demand from infrastructure, automobiles, and capital goods.”

“On the global front, Trump’s decision to delay tariffs on Canada and Mexico after initially imposing them sparked a rush among buyers to hoard inventory before the tariffs take full effect, leading to supply concerns. This impact was visible from February 4th, as metal prices began rising sharply due to fears of shortages. This price surge, in turn, ignited a strong rally, evident in the Nifty Metal Index gaining nearly 5% in just three days,” said Mayank Mundhra.

Stocks to watch on Monday

“Infrastructure development projects in India require large quantities of metal products, creating a significant market for metal companies. Companies like Tata Steel, JSW Steel, and Hindalco Industries have experienced substantial growth in their market values. Overall, combining global and Indian factors has created a favourable environment for metal stocks to surge,” Seema Srivastava of SMC Global Securities concluded.

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