The gains followed the Chinese government's decision to step up its fiscal stimulus. The country's top parliament body has approved a 1 trillion yuan ($137 billion) in sovereign bond issuance to help rebuild areas hit by this year's floods and improve urban infrastructure to cope with future disasters.
In a rare move, China sharply lifted its 2023 budget deficit to around 3.8 per cent of gross domestic product from an originally set 3 per cent due to the rise in central government debt, according to state media. The world's second-largest economy consumes almost half of the global metals supply. As a result, China's economic outlook has a huge bearing on metal prices.
"The losses in the market were contained by metal stocks which gained today following news reports of China announcing stimulus measures, which is a positive for the Chinese economy and subsequently for metal prices across the world," said a note by StoxBox.
The BSE Metal index is up 7.7 per cent so far this calendar year, slightly outperforming the benchmark Nifty 50 index, which is up 5 per cent. China's GDP rose 4.9 per cent for the July-September 2023 period year-on-year. The move prompted economists to lift their growth forecasts for China. Analysts believe a sustained economic recovery in China can lead to a pricing as well as demand recovery for the metals sector.