• There has been a huge demand for the precious metal in the recent past due to the sharp fall in the dollar index. Also, the recent removal of export duty on steel has revived interest in steel stocks.
Metal stocks outperformed the broader markets on Monday with strong buying in heavyweights such as Nalco, Hindalco, Vedanta, and Tata Steel. Metal indices on both BSE and NSE extended their gains for the fifth consecutive day. There has been a strong demand for the precious metal in recent days due to the sharp fall in the dollar index. Also, the recent removal of export duty on steel has revived interest in steel stocks. Moreover, metal companies are in news due to their monthly production performance.
In early deals, BSE Metal and Nifty Metal indices rose around 2% each. While from November 29 to date, BSE Metal climbed nearly 7%, while Nifty Metal jumped over 6%.
At around 9.59 am, BSE Metal was trading at 21,020.40, up 300.16 points or 1.45%. The index touched a high of 21,138.16 after opening at 20,831.15. Barring APL Apollo, all other metal stocks are up. On the other hand, the markets witnessed profit-booking with Sensex and Nifty 50 falling 0.5% each. India's volatility index is up about 3%.
NALCO lead the rally with gains of around 4%, followed by Hindalco and Vedanta which rose over 2.6% and 2.15% respectively. Shares of Tata Steel, JSW Steel and SAIL advanced around 2% each. There was also significant buying in JSPL and Coal India with gains of around one per cent each.
The dollar index lost its 105 support level and fell to its lowest level since June 28 as risk-on currencies gained momentum. The dollar has been under pressure following comments from US Federal Reserve Chairman Jerome Powell that signaled a less accommodative stance in upcoming policies.
On Monday, a Bloomberg report highlighted that the US dollar erased more than half of this year's gains, fueled by growing haven demand from rising bets that the Federal Reserve will continue its aggressive rate hikes and China's reopening. Will put a stop to it. The Bloomberg Dollar Spot Index has trimmed this year's gains to about 7% after earlier gaining 16%.
In its research note dated December 2, ICICI Securities disclosed that hot-rolled coil (HRC) prices declined by Rs 700-1,000 per tonne in key markets of Mumbai and Ludhiana as traders were reluctant to import steel. Select the option. It added, "Our channel checks indicate that some traders have booked small quantities of HRC from Japan at USD 580-590/TE CFR, which implies a discount of 10% on the domestic price. Hence , we may see further correction in domestic steel prices."
Besides, there is no respite on the exports front as demand has slowed down due to sluggish construction sector in Vietnam, the stock brokerage's note said. As a result, bids for imported HRC are stuck at US$520-540/te. In addition, demand for CRC and HDG in Europe has also been weak.
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