National Aluminium, Tata Steel, Jindal Stainless, Hindalco Industries, and Vedanta were among the key metal stocks that continued to edge higher in an otherwise subdued trade on Friday, October 3, supported by a series of positive developments that are sustaining demand for the sector.
Among the top gainers, NALCO led the charge with a 4.7% surge to the day’s high of ₹224 apiece, followed by Tata Steel, Jindal Stainless, Hindalco Industries, Vedanta, JSW Steel, Hindustan Zinc, and Hindustan Copper, which advanced between 2% and 4%.
The strong rally in individual counters pushed the Nifty Metal index to a fresh record high of 10,343, up 2.5%, marking its fourth consecutive day of gains. The recent uptrend has also lifted the index by 4.54% so far this week and nearly 3% in just the first three trading sessions of October.
What’s fueling the continued rally in metal stocks?
Multiple factors are currently fueling the rally in metal stocks. These include the fall in the US dollar index amid expectations of multiple rate cuts by the US Federal Reserve, reports that the European Union is preparing to hike steel import tariffs to 50%, and a continued rise in base metals such as copper.
In addition, an improving demand outlook, expectations of steel price hikes, safeguard duties, analysts’ target price upgrades, and China’s steel output cuts are all lending strong support to the sector.
Further, the central bank, in its recent MPC meeting, signaled confidence in the domestic economic outlook, while GST rate cuts are expected to drive demand for autos, consumer durables, household items, and other sectors that rely heavily on steel, aluminium, iron, and other metals — giving a further boost to metal stocks.
Meanwhile, copper prices continue to shine globally, with three-month futures climbing for a third straight day to cross $10,500 a ton on the London Metal Exchange, up more than 3% this week. This rally has triggered a nearly 50% surge in Hindustan Copper’s share price over just five weeks.
Steel stocks have also remained in focus after the Directorate General of Trade Remedies (DGTR) proposed safeguard duties (SGD) of 11–12% for three years to protect domestic steel mills from price undercutting. Since the safeguard announcement, net imports have plunged by nearly 50%, underlining firm domestic fundamentals.
Analysts have turned bullish on metal stocks
Axis Capital, in its latest report, has raised its target EV/EBITDA valuations for all steel companies under its coverage to a 10% premium over the past 10-year average, citing strong volume growth prospects and improved margin visibility. The brokerage also lifted target prices for JSW Steel, Jindal Steel, Tata Steel, and SAIL to ₹1,245, ₹1,170, ₹160, and ₹110, representing increases of 49%, 18%, 16%, and 10%, respectively.
On ratings, Axis Capital upgraded JSW Steel and Jindal Steel to ‘ADD’ from ‘Sell’ and ‘Reduce,’ respectively, while remaining cautious on Tata Steel (upgraded to ‘Reduce’ from ‘Sell’) and SAIL (maintained ‘Sell’) due to the lack of meaningful capacity growth plans until FY28.
Earlier, global brokerage Morgan Stanley also upgraded its ratings on JSW Steel, Tata Steel, and SAIL, while maintaining an Equalweight stance on Jindal Steel & Power, with target prices set at ₹1,300 for JSW Steel, ₹200 for Tata Steel, ₹140 for SAIL, and ₹1,150 for Jindal Steel & Power.
Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
