Metal stocks soar as stocks increase due to a weaker currency and slowing US inflation

 Metal stocks soar as stocks increase due to a weaker currency and slowing US inflation

In tandem with local shares, which surged after the dollar's slide and slowing US inflation, metal stocks were also rising.

A decline in the value of the dollar due to a reduction in US retail inflation gave metal equities even more appeal.

Hindalco Industries increased by 4%, NALCO by 2.2%, Tata Steel by 2%, JSW Steel by 1.6%, Vedanta by 1.3%, and Coal India by more than 1%. On November 15, at 11:20 a.m., the benchmark Sensex had gained 0.9%, while the BSE Metal index had gained 1.6%.

Although the Fed's highly watched super-core CPI dropped to a three-month low of 0.22 percent from 0.61 percent in September, US consumer price inflation stayed constant in October, surprising forecasts for a 0.1 percent increase.

Nomura has revised its prediction for the US recession to 3Q24, indicating a positive "soft-landing" for equities in 1Q24. Major risks to Nomura's view, however, include increasing oil prices, geopolitical concerns, and the possibility of the Fed returning to an accommodating stance.

Thus far, metal firms' September quarter profits have exceeded expectations. JSW Steel surpassed Tata Steel despite both companies meeting analysts' projections due to decreased input prices, particularly for coking coal. Tata Steel's reduced tax expense led to a better net profit. Revenue and EBITDA for Jindal Steel & Power were in line with projections, but net profit was higher since financing and depreciation costs were lower.

Analysts predicted that even though coking coal prices increased by more than $350 per tonne during the quarter, the negative effects would probably persist until 3QFY24. Industries like automotive, industrial construction, infrastructure, and commercial real estate continue to be major drivers of strong domestic demand. Analysts said that Tata Steel's activities in the EU are expected to encounter further obstacles in addition to the current ones.

"Performance in Q2FY24 in terms of sales increase and operating efficiency was in line with consensus estimates predominantly due to decline in coking costs for coal as well as stable steel prices," Yes Investments said in its most recent note.

Strong domestic demand has helped local manufacturers by maintaining the high price of Indian steel. Nonetheless, low-cost imports from China continue to be a cause for worry as they drive up prices despite a lackluster reopening and surprisingly strong Chinese exports. The long-term forecast for the Indian steel industry is encouraging, according to analysts, but given the present short-term difficulties that steel makers are facing, prudence is urged.