Metal stocks defied the market crash with Nifty metal and BSE metal indices hitting their record highs in early deals today. On Sensex, JSW Steel and Tata Steel were among the the top gainers. JSW Steel shares hit a record high of Rs 1,027, rising 2.52% against the previous close of Rs 1001.75 on BSE. Market cap of JSW Steel climbed to Rs 2.5 lakh crore.
Similarly, Tata Steel shares gained 2.22% to Rs 170.20 on BSE. Market cap of the firm stood at Rs 2.11 lakh crore.
Nifty Metal hit its record high, climbing 200 pts to 10,263. Similarly, BSE metal index reached its all time high of Rs 34,784.25.
Another metal stock NMDC climbed 5.14% to Rs 247.10 against the previous close of Rs 235.10 on BSE. Market cap of NMDC climbed to Rs 71,917 crore.
Shares of SAIL, another iron and steel producer, gained over 2% to Rs 143.95 against the previous close of Rs 140.45.
Vedanta stock climbed 2% to Rs 523.60 in early deals today against the previous close of Rs 512.85 on BSE. Market cap of the firm climbed to Rs 2.01 lakh crore.
Shares of aluminium maker Hindalco gained 2.30% a record high of Rs 764.40 against the previous clos of Rs 747.40 on BSE. Market cap of the firm climbed to Rs 1.70 lakh crore. On Nifty, JSW Steel, Tata Steel and Hindalco were the top gainers, rising up to 2.5% . The surge in the metal counters came amid the market crash today as real estate shares in China rose on Monday. The rally came after Shanghai, Shenzhen and Guangzhou relaxed homebuying curbs. The Chinese central bank also said it will allow refinancing of mortgages.
According to a Bloomberg report, the trading hub of Guangzhou became the first tier-1 city to remove all restrictions on Sunday. The cities authorities will stop reviewing homebuyer eligibility and no longer limit the number of homes owned. Both Shanghai and Shenzhen said more people will now be allowed to purchase residences in suburban areas, as well as allow others to buy more homes.
Parthiv Jhonsa, Lead Analyst (Metal & Mining), Anand Rathi Institutional Equities said, "Metal stocks have rallied driven by the renewed optimism from the property sector relaxation in three major metro cities (Shanghai, Shenzhen and Guangzhou). The Chinese government has declared multiple monetary and fiscal stimulus over last week, which have kept the prices elevated as China enters its week long holiday. Though the stimulus this time has been one of the biggest in recent years, it is still preliminary to know the result. Though continuous stimulus has definitely lifted the optimism, we believe, China faces multiple execution headwinds in near term considering the backlog in property sector, subdued factory activity, record unemployment in recent months, etc. However on domestic front, the demand for metal is robust. Domestic iron ore production increased by 7.4% y/y to 116 mn tonnes, Coal production increased by 6.5% y/y to 384 mn tonnes, crude steel production increased by 5% y/y to 48.8 million tonnes, manganese ore production increased by 15.4% y/y to 1.5 mn tonnes, etc."
Prices of iron ore climbed 11% after easing of curbs in three Chinese cities. China is the world's largest importer of metals. This also boosted sentiment in the real estate stocks in Chinese market.
On September 24, metal stocks surged up to 6% after China announced measures to boost the property market.
China will lower the interest rates of existing mortgage loans and unify the down payment ratios for mortgage loans, said reports.