Active Stocks
Tue Apr 16 2024 15:59:30
  1. Tata Steel share price
  2. 160.05 -0.53%
  1. Infosys share price
  2. 1,414.75 -3.65%
  1. NTPC share price
  2. 359.40 -0.54%
  1. State Bank Of India share price
  2. 751.90 -0.65%
  1. HDFC Bank share price
  2. 1,509.40 0.97%
Business News/ Markets / Stock Markets/  Nifty Metal Index rises 3%; Tata Steel, JSW Steel, SAIL, Hindalco gain up to 6% as China cuts Banks Reserve Ratios
BackBack

Nifty Metal Index rises 3%; Tata Steel, JSW Steel, SAIL, Hindalco gain up to 6% as China cuts Banks Reserve Ratios

Stock Market Today- Share prices of Tata Steel, JSW Steel, Jindal Steel, SAIL, NMDC, Hindalco gained up to 6%, while Nalco more than 6%, leading Nifty metal Index gain 3%. China Central Bank decided to cut the reserve requirement ratio for all banks by 50 bps to boost economic growth driving gains.

Metal share prices on a roll as China central Banks decides to cut RRR (Photo: Bloomberg)Premium
Metal share prices on a roll as China central Banks decides to cut RRR (Photo: Bloomberg)

The NSE metal index gained almost 3% as ferrous and nonferrous manufacturers saw sharp rise in their share prices. Share prices of Tata Steel , JSW Steel and Jindal Steel and Power gained up to 4% while Steel Authority of India Ltd saw its share price rise almost 6% on news flow around China Central Bank to cut reserve ratio  requirement and boost economic growth. 

The People's Bank of China (PBOC) has decided to cut the reserve requirement ratio (RRR) for all banks by 50 basis points (bps) in February to boost the economic growth. The uptick in Chinese economy can provide strong boost to demand for metals with China being the largest consumer of commodities globally. The rise in China internal Consumption demand will also mean that exports from China in the global markets may also decline, providing support to the international metal prices.

Also Read- Tata Elxsi share price down 5% after disappointing Q3 results; what should investors do now?

Not surprising that while share prices of Steel manufacturers gained, those of Aluminium and other base metal producers as National Aluminium Co. Hindustan Copper gained up to 7% while Hindalco Industries Ltd saw its share price rise almost 5%

The hopes had remained high on metal demand getting a boost in 2023 post China eased its Covid restrictions and opened up its economy. The demand however disappointed with slowing Chinese economic growth amidst the real estate crisis. 

Hence China Central Banks efforts to cut the amount of cash that banks must hold as reserves, as a step to boost economic growth has been welcomed by investors.

A 50 basis points cut to the reserve requirement ratio (RRR) is expected to inject 1 trillion yuan ($140 billion) of liquidity into the market, suggest news reports.

Also Read -Mahanagar Gas Q3 Results: Should you Buy, Sell or Hold the stock post earnings ?

The Steel prices that have been under pressure globally due to high China exports can get a boost if China exports reduce and China internal demand catches pace. Indian manufacturers whose export volumes are suffering may also see some recovery

The raw material used in steel making as iron-ore and Coal can also get demand boost if China production catches pace. Not surprising share prices on NMDC Ltd gained almost 5% and  Coal India also gained  2%. 

 

Als

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

ABOUT THE AUTHOR
Ujjval Jauhari
Ujjval Jauhari is a deputy editor at Mint, with over a decade of experience in newspapers and digital news platforms. He is skilled in storytelling, reporting, analysing and writing about stocks, investment ideas, markets, corporates and more. He is based in New Delhi.
Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 24 Jan 2024, 04:24 PM IST
Next Story footLogo
Recommended For You
GENIE RECOMMENDS

Get the best recommendations on Stocks, Mutual Funds and more based on your Risk profile!

Let’s get started
Switch to the Mint app for fast and personalized news - Get App