Here's why Nifty Metal index rose over 1% on November 26; details inside

Nifty Metal index rises: Nifty Metal Index rose up to 1.10 per cent to hit an intraday high of 8.981.05 levels on Tuesday, November 26, 2024. 

 

Analysts attribute this uptick in the Metal index to a renewed inflow of foreign investments into India, particularly targeting metal stocks, as funds shift back from the United States.

 

After weeks of heavy selling since October, foreign institutional investors (FIIs) turned net buyers on November 25, acquiring shares worth Rs 9,947.55 crore. In contrast, domestic institutional investors (DIIs) offloaded shares worth Rs 6,907.97 crore during the same session.

 

At 11:52 AM, 12 of the 15 stocks in the Nifty Metal Index were trading in the green, while three remained in the red. 

 

Among the gainers, APL Apollo Tubes led with a nearly 4 per cent rise, followed by Nalco (1.88 per cent), Jindal Steel (1.83 per cent), SAIL (1.67 per cent), JSL (1.52 per cent), Vedanta (1.33 per cent), Welspun Corp (1.15 per cent), Tata Steel (1.06 per cent), Hindalco (0.98 per cent), JSW Steel (0.41 per cent), Hindustan Copper (0.34 per cent), and NMDC (0.10 per cent).  On the downside, Hindustan Zinc, Ratnamani Metals and Tubes, and Adani Enterprises declined by 0.20 per cent, 1.20 per cent, and 3.15 per cent, respectively.  Another contributing factor in the rise of the Metal index could be the recent announcement by President-elect Donald Trump of a 10 per cent tariff on Chinese goods, according to reports. If these tariffs are implemented, analysts believe, India is set to benefit as an alternative trade partner and supplier.

      

Additionally, the surge in the Metal index could be fuelled by China's recently announced stimulus measures aimed at reviving its slowing economy. Earlier, Chinese authorities rolled out several initiatives to counter the prolonged property crisis and weak consumer sentiment. 

 

At the beginning of this month, China’s Ministry of Finance introduced a 5-year fiscal package worth 10 trillion yuan ($1.4 trillion) to address local government debt issues, hinting at further economic support measures in 2025.

 

From a technical perspective, Jigar S Patel, senior manager, technical research, Anand Rathi Shares and Stock Brokers noted, “On the hourly chart, the NIFTY Metals index displayed a bullish divergence on November 21, 2024. This technical pattern occurs when the price makes a lower low, but the momentum indicator (such as RSI or MACD) makes a higher low, signaling a potential reversal or bounce in price. As a result, the index rebounded from its key support level of 8700 and has since climbed above 8,900.”