Nifty Metal Index Sees Biggest 1-Day Gain in 2 Months – Here’s Why

Indian metal stocks saw strong buying on March 5, driven by China’s decision to keep its 2025 growth target at 5%, the same as last year. Investors were also encouraged by China’s latest stimulus measures to support economic growth amid ongoing trade tensions with the U.S. This led to a surge in metal prices and increased optimism about demand staying strong.

Nifty Metal Index Surges 3%

In response, the Nifty Metal index jumped 3% in intraday trade, reaching 8,600, its best one-day gain since January 14.

All 15 stocks in the index traded higher, with Hindustan Copper leading the rally, gaining 5.2%. Other top gainers included:

• Welspun Corp, Jindal Stainless, Adani Enterprises, APL Apollo Tubes, Vedanta, and Tata Steel, which rose over 3%.
• NALCO, SAIL, JSW Steel, NMDC, Hindalco Industries, Jindal Steel & Power, Hindustan Zinc, and Ratnamani Metals & Tubes, which gained between 1% and 2.7%.

China’s Economic Growth Plan

China, the world’s second-largest economy and biggest consumer of metals set a 5% GDP growth target for 2025. To support this goal, the government announced a fiscal stimulus, raising the budget deficit to 4%, the highest since 2010. This move aims to tackle key issues such as:

• Weak consumer demand
• High youth unemployment
• Property sector debt crisis

China has been implementing monetary and fiscal measures, including:

• Interest rate cuts
• Lower down payments for home loans
• Increased government spending

These steps are expected to revive the economy in 2024 and support demand for metals.

Trade Tensions Between the U.S. and China

The metal rally also comes amid rising trade tensions between China and the U.S.

• U.S. Tariffs: Donald Trump raised tariffs to 20% on Chinese imports starting March 5.
• China’s Response: On March 10, China will impose additional tariffs of up to 15% on U.S. agricultural products like chicken, pork, soy, and beef.

Earlier, China retaliated against U.S. sanctions by:

• Increasing duties on U.S. energy imports
• Restricting U.S. companies from operating in China

Conclusion

China’s economic support measures and rising trade tensions have fueled optimism in the metal sector, leading to a strong rally in Indian metal stocks. With China remaining committed to economic growth and infrastructure development, metal demand is expected to stay strong in the near future.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.