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BSE Metal index rises over 4%, posts biggest single-day jump in 17 months

Apart from the rise in metal prices, some stock-specific reasons, like the demerger of Vedanta group companies into separate entities, have also led to the rally in the metal pack

bse stock market

Sundar Sethuraman Mumbai

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The BSE Metal index rose 4.1 per cent on Tuesday—its biggest single-day gain since December 27, 2022—amid a sustained rally in global metals and commodity prices. Anil Agarwal-led Vedanta rose 7.2 per cent to Rs 492, a fresh record high. Jindal Steel, Hindalco, and Coal India rose around 5 per cent each. Hindustan Zinc, another Anil Agarwal firm, rallied 20 per cent. Global metal prices have been firming up this year amid an improved economic outlook for China and the rest of the world.

Apart from the rise in metal prices, some stock-specific reasons, like the demerger of Vedanta group companies into separate entities, have also led to the rally in the metal pack.

 

"There is an anticipation of global economic growth and expectations of rate cuts. And the better indicators from China have boosted commodity prices," said Chookalingam, a cofounder of Equinomics. Regarding the outlook, Chokkalingam said metal stocks could correct as the rate cuts are likely to be delayed and the valuation of metal stocks is elevated.

"Both metal and metal stock prices are at a peak, and whenever that has happened, it was followed by a correction," said Chokkalingam.

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First Published: May 21 2024 | 6:57 PM IST

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