Nifty Metal Index Rallies Over 2%, JSW Steel Hits New High – 3 Reasons Behind the Surge

In today’s stock market session, metal stocks were the best performers, with 13 out of 15 companies in the Nifty Metal index trading in the green. The index jumped by 2.16%, reaching 9,451 points after a three-day losing streak.

The rally in metal stocks is driven by three main factors:

1. Positive Global Reports: Global brokerage firms have shared an optimistic view on metal stocks, raising their target prices for several companies. This has boosted investor confidence and lifted the stock prices.
2. China’s Housing Market: Reports indicate that China is considering easing some of its remaining restrictions on home purchases. This move has reignited interest in metal stocks, as China’s housing market plays a key role in global metal demand.
3. US Federal Reserve’s Rate Cuts: The recent aggressive rate cuts by the US Federal Reserve have pushed metal prices higher, creating a favorable environment for metal companies to benefit.

Among the top performers, JSW Steel hit a new all-time high of ₹988 per share, inching closer to the ₹1000 mark. Other stocks, like Jindal Stainless, also saw gains between 5% and 3%.

Macquarie’s Outlook

Global firm Macquarie has raised its target price for JSW Steel to ₹1,077 and maintained an ‘Outperform’ rating. It also increased target prices for Jindal Steel & Power (₹1,170), Hindalco (₹760), Tata Steel (₹171), and Coal India (₹541), highlighting strong domestic fundamentals and lower input costs as key drivers for growth.

Morgan Stanley’s Take

Morgan Stanley also increased its target price for JSW Steel to ₹895 and Jindal Steel & Power to ₹970, with an ‘Equal Weight’ rating. However, it gave a more cautious outlook for Tata Steel (target price of ₹135) and SAIL (₹105), citing strong supply and limited positive triggers for margins.

Despite the rally, Morgan Stanley warned that steel stocks may continue to underperform the broader market due to high supply and less attractive valuations.