On strong global cues, with US indices notching new highs in overnight trade, Indian indices in line with global peers are trading with gains. Broader markets are though underperforming the headline indices.
Among Nifty sectoral indices it is once again the Nifty metal index that has hogged the limelight, making gains to the tune of more than 4%. The rally is led by stocks such as Tata Steel, Hindustan Zinc, Vedanta, JSW Steel and Hindalco. Though one of the constituent namely APL Apollo is dragging the index lower.
Talking specifically of the steel space within the metal segment there was has been sharp rise in the steel price and the price rise is expected to continue for 2-3 quarters i.e. one reason fuelling the rise in stock price of these steel company shares. Also, as China is known to reduce production because of environmental reasons it has become a net importer of Steel and hence this is another reason supporting steel sector of India.
In fact for other metals too prices are scaling to multi-year highs globally owing to weakness in the dollar, lesser availability of the metal and growing demand from China.