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Metal stocks continued their upward momentum on Friday, October 3, even as overall market sentiment remained subdued
Metal Stocks
Metal stocks continued their upward momentum on Friday, October 3, even as overall market sentiment remained subdued. National Aluminium (NALCO), Tata Steel, Jindal Stainless, Hindalco Industries, and Vedanta were among the key gainers, supported by a series of positive developments that are sustaining demand for the sector.
NALCO led the rally with a 4.7% surge to the day’s high of ₹224 apiece. Other heavyweights, including Tata Steel, Jindal Stainless, Hindalco Industries, Vedanta, JSW Steel, Hindustan Zinc, and Hindustan Copper, advanced between 2% and 4%.
The strong buying in these stocks pushed the Nifty Metal index to a new record high of 10,343, up 2.5% for the day. This marked its fourth consecutive session of gains. The index has now gained 4.54% so far this week and nearly 3% in the first three trading sessions of October alone, underlining the sector’s strong performance.
The rally in metal counters is being driven by a mix of global and domestic factors. The decline in the US dollar index, amid expectations of multiple rate cuts by the US Federal Reserve, has been one of the key global triggers. Reports suggesting that the European Union may hike steel import tariffs to 50% and the continued rise in base metals like copper have further lifted sentiment.
Domestically, an improving demand outlook, anticipated steel price hikes, the imposition of safeguard duties, analysts’ target price upgrades, and China’s steel output cuts have all contributed to strengthening the sector. The Reserve Bank of India, in its recent Monetary Policy Committee meeting, signaled confidence in the country’s economic outlook. Meanwhile, recent GST rate cuts are expected to spur demand for autos, consumer durables, household goods, and other metal-intensive industries, giving further impetus to the sector.
Steel stocks have also gained traction after the Directorate General of Trade Remedies (DGTR) proposed safeguard duties of 11–12% for three years to protect domestic mills from cheap imports. Since the announcement, net imports have fallen by nearly 50%, underscoring the robust fundamentals in the domestic steel market.
Adding to the sector’s momentum, analysts have turned bullish. Axis Capital, in its latest report, raised its target EV/EBITDA valuations for all steel companies under its coverage to a 10% premium over their 10-year average, citing strong volume growth and improved margin visibility. The brokerage revised its target prices upward to Rs 1,245 for JSW Steel (up 49%), Rs 1,170 for Jindal Steel (up 18%), ₹160 for Tata Steel (up 16%), and Rs 110 for SAIL (up 10%).
In terms of ratings, Axis Capital upgraded JSW Steel and Jindal Steel to ‘ADD’ from ‘Sell’ and ‘Reduce,’ respectively. Tata Steel was upgraded to ‘Reduce’ from ‘Sell,’ while SAIL retained its ‘Sell’ rating due to a lack of significant capacity expansion plans until FY28.
Earlier, global brokerage Morgan Stanley had also revised its outlook on the sector, upgrading JSW Steel, Tata Steel, and SAIL, while maintaining an ‘Equalweight’ stance on Jindal Steel & Power. It set target prices of Rs 1,300 for JSW Steel, Rs 200 for Tata Steel, Rs 140 for SAIL, and Rs 1,150 for Jindal Steel & Power.
Overall, the combination of favorable policy measures, strong domestic demand, positive global developments, and upbeat analyst forecasts has continued to fuel the rally in metal stocks, positioning the sector as a standout performer in the market.
Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a…Read More
Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a… Read More
October 03, 2025, 14:38 IST
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