Metal Stocks Outlook
Seen rising on hopes of global demand recovery
This story was originally published at 19:36 IST on 27 September 2024
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MUMBAI – Shares of metal companies are expected to extend gains next week on hopes of recovery in global demand after China announced a slew of measures to boost its economy. The Nifty Metal index closed 0.8% higher at 10064.60 points today, extending gains for the sixth straight session. The index has risen nearly 9% in the last six sessions.
The Nifty Metal index is looking strong and trading on the verge of a fresh breakout, said Vipin Kumar, senior technical and derivatives analyst at Globe Capital Market. According to Kumar, the index might rise further to 10600 points if it manages to cross and sustain above 10200 points.
The People's Bank of China today cut its seven-day reverse repurchase rate and lowered the reserve requirement ratio for banks. The central bank had said it would cut its key interest rate and lower the amount of cash that banks need to hold in reserve in a bid to free up more resources for lending.
Earlier in the week, the government of China also lowered the minimum down-payment ratio on second home purchases to 15% from 25%. The move could revive demand in the country's real estate sector and will boost sales of empty homes, according to a research analyst with a domestic brokerage.
"We believe that the Chinese housing market has been struggling for the past four years, and unless there is stabilisation in prices and a reduction in unsold inventory, any government initiatives will likely be inadequate," Parthiv Jhonsa, lead analyst (metal and mining) at Anand Rathi Institutional Equities, said in a note this week. The record inventories and increased output from some major global miners will continue to exert pressure on metal prices, Jhonsa said.
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Following are the resistance and support levels for the stocks for next week as per calculations by Informist based on their prices on the National Stock Exchange:
| Company | Price | Week-on-week change in % | Resistance | Support |
| Hindalco Industries | 747.15 | 7.60 | 764.60 | 733.40 |
| Hindustan Copper | 344.50 | 4.50 | 355.90 | 337.30 |
| Hindustan Zinc | 523.05 | 4.50 | 530.50 | 512.80 |
| Jindal Steel & Power | 1028.05 | 1.90 | 1067.20 | 991.60 |
| JSW Steel | 1001.55 | 2.00 | 1027.40 | 984.60 |
| NMDC | 235.18 | 10.70 | 241.90 | 230.90 |
| Steel Authority of India | 140.54 | 11.30 | 146.00 | 136.90 |
| Tata Steel | 166.55 | 9.60 | 170.30 | 164.00 |
| Vedanta | 513.00 | 14.00 | 521.50 | 501.70 |
| Nifty Metal | 10064.60 | 7.00 | 10215.60 | 9968.10 |
| Nifty 50 | 26178.95 | 1.50 | 26328.50 | 26076.60 |
| S&P BSE Sensex | 85571.85 | 1.20 | 86178.60 | 85171.20 |
End
Reported by Noel John
Edited by Saji George Titus
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