 "Metal shares in focus; Tata Steel, Hindalco up 5%")
Shares of metal companies are in focus with Nifty Metal index surging over 4% in noon deal trade on the National Stock Exchange (NSE) after LMEX, a gauge of six metals traded on the London Metal Exchange (LME), hit nearly four-month high on Wednesday, March 2, 2016.
Jindal Steel & Power Limited (JSPL), Vedanta, Tata Steel, Hindalco Industries and NMDC rallied more than 5% each. Steel Authority of India (SAIL), Jindal Saw, JSW Steel, National Aluminium Company (Nalco) and Bhushan Steel were up 2%-3% on the NSE.
At 01:23 PM, Nifty Metal index was up 4.2% as compared to 1.3% rise in the Nifty 50 index. Post Union Budget, in past three trading sessions, the metal index surged 9.3% against 6.7% gain in the benchmark index.
LMEX gained nearly 4% in past four trading sessions to 2,288 from 2,206 on February 25. The index close at its highest level since November 6, 2015 on LME, the Bloomberg data shows.
Meanwhile, the government proposed to increase customs duty on aluminium to 7.5% from 5%, while export duty on low grade (below 58% iron content) iron ore lumps and fines was scrapped.
According to CRISIL Research, hike in customs duty on aluminium will narrow the gap between landed cost of aluminium and domestic aluminium prices, thereby curbing aluminium imports.
Scrapping of export duty on low grade iron ore lumps and fines will benefit iron ore exporters – primarily from Goa, which has the largest concentration of low grade iron ore – as their tax burden will reduce by around Rs 950 per tonne and around Rs 250 for lumps and fines, respectively. Lowering of export duty on bauxite will benefit exporters such as Nalco.
However, doubling of clean environment cess to Rs 400 per tonne is a negative – aluminium manufacturers’ power cost is expected to rise by around 3% and sponge iron manufacturers’ total production cost is expected to increase by 2-3%, the research firm said in a report.
Among the individual stocks, Tata Steel surged 6% to Rs 284 on reports that the company gets green nod for Rs 1,877 crore expansion project. The BSE has sought clarification from the company. The reply is awaited.
Jindal Steel & Power Limited (JSPL), Vedanta, Tata Steel, Hindalco Industries and NMDC rallied more than 5% each. Steel Authority of India (SAIL), Jindal Saw, JSW Steel, National Aluminium Company (Nalco) and Bhushan Steel were up 2%-3% on the NSE.
At 01:23 PM, Nifty Metal index was up 4.2% as compared to 1.3% rise in the Nifty 50 index. Post Union Budget, in past three trading sessions, the metal index surged 9.3% against 6.7% gain in the benchmark index.
LMEX gained nearly 4% in past four trading sessions to 2,288 from 2,206 on February 25. The index close at its highest level since November 6, 2015 on LME, the Bloomberg data shows.
Meanwhile, the government proposed to increase customs duty on aluminium to 7.5% from 5%, while export duty on low grade (below 58% iron content) iron ore lumps and fines was scrapped.
According to CRISIL Research, hike in customs duty on aluminium will narrow the gap between landed cost of aluminium and domestic aluminium prices, thereby curbing aluminium imports.
Scrapping of export duty on low grade iron ore lumps and fines will benefit iron ore exporters – primarily from Goa, which has the largest concentration of low grade iron ore – as their tax burden will reduce by around Rs 950 per tonne and around Rs 250 for lumps and fines, respectively. Lowering of export duty on bauxite will benefit exporters such as Nalco.
However, doubling of clean environment cess to Rs 400 per tonne is a negative – aluminium manufacturers’ power cost is expected to rise by around 3% and sponge iron manufacturers’ total production cost is expected to increase by 2-3%, the research firm said in a report.
Among the individual stocks, Tata Steel surged 6% to Rs 284 on reports that the company gets green nod for Rs 1,877 crore expansion project. The BSE has sought clarification from the company. The reply is awaited.