Metal scrips bullish on global push

Firm global prices continue to bring lustre on the metal stocks back home. On Monday, even as the benchmark Sensex inched up 0.63 per cent, the BSE Metal index shot up 4.88 per cent to reach 9,624.7. Dealers said that the momentum on the LME has led to the shine on Indian metal stocks.

The major gainers on Monday were Madras Aluminium (up 20 per cent to Rs 333.95), Kalyani Steel (up 20 per cent to Rs 375.3), Jindal Stainless (up 14.3 per cent to Rs 127.45), JSW Steel (up 11.21 per cent to Rs 359.25), Uttam Galva Steel (up 10.8 per cent to Rs 48.7), Essar Steel (up 8.18 per cent to Rs 52.25), Tata Steel (up 6.91 per cent to Rs 579.15), Sail (up 5.11 per cent to Rs 84.35) and Hindustan Zinc (up 4.73 per cent to Rs 685.9). Most of these stocks have also seen a strong growth over the past month.

Aditya Birla Group major - Hindalco - has appreciated by nearly 20 per cent over the one month. Brokers felt that reports about the upcoming IPO of an Aditya Birla Group, has been a trigger behind the rally in this stock.

Mitesh Shah, assistant vice president, PCG sales, Brics, said, "The Idea stake coming to the Birlas from the Tatas also gives hidden value to companies like Hindalco."

Shah added that the upswing in metal stocks has been on the back of positive outlook on the sector. Aluminium cycle is strong and analysts are also bullish on the steel industry.

Companiesl like Tisco, Sail, Hindalco, Nalco, Hindustan Zinc and JSW steel are being viewed positively.

Brokers added that zinc prices touched $ 2,800 per tonne on LME on Friday and are expected to touch $ 3,000. A similar trend is being witnessed in copper prices.

Some are of the opinion that in India those companies which can install more capacity as well as have their own raw material sources are better placed to benefit from the global developments.

The gain in Tata Steel has been on the back of reports that it is eyeing a stake in South Africa's Highveld Steel.