Latest news with #KrantiBathini
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Business Standard
20-05-2025
- Business
- Business Standard
Metal stocks in focus: What should investors do amid global uncertainty?
Metal stocks in focus: The base metal industry seems to be caught in a demand-supply mismatch, threatening the near-term growth outlook for related players. Besides, flip-flops in trade deal negotiations between the United States (US) and China are adding to the uncertainty, leaving analysts cautious about the metal sector. Analysts believe a troica of a supply surplus, weak demand, and strengthening of the US dollar may keep metal prices under pressure in the near-to-medium term, keeping stocks of related players sideways. "Overall, for medium-to-short-term metals stocks are going to be range-bond," said Kranti Bathini, director of equity strategy, WealthMills Securities. Notably, an increase in metal prices aids revenue per unit sold for companies extracting or selling those metals. Conversely, when metal prices fall, earnings drop and stock prices decline. Supply surplus According to International Copper Study Group (ICSG), an autonomous inter-governmental organisation which maintains database for copper prices, global copper market is projected to witness a global surplus of 289,000 tonnes in 2025 -- more than double the 138,000 tonnes recorded in 2024, and significantly higher than previous estimates of 194,000 tonnes. The growing surplus is attributed to increased mine supply and smelting capacity. On the flipside, the organisation expects uncertainties around international trade policy, especially between the US and China, to reduce copper demand. It expects refined copper consumption to grow 2.4 per cent in 2025, lower than the previous projection of 2.7 per cent and a growth of 2.8 per cent in 2024. Copper demand may further slow to 1.8 per cent in 2026—largely driven by a drop in Chinese usage, from 2 per cent this year to just 0.8 per cent next year, it forecasts. China: A key monitorable Analysts view the US-China trade, having a direct impact on China's metal demand, as the key monitorable for metal prices. China is a major global consumer of metals, particularly base metals. According to a note by Motilal Oswal Financial Services, the recently announced US-China tariffs are less severe than expected, but present a notable hurdle to global trade. This, the brokerage believes, could potentially dampen demand for key raw materials used in metal production, capping any gains in metal prices. Last week, the US and China jointly declared a 90-day pause on a portion of their existing tariffs. China agreed to lower tariffs on US goods from 125 per cent to 10 per cent, and the US affirmed to reduce tariffs on Chinese goods from 145 per cent to 30 per cent. Amid severe price volatility, Aluminium is quoting around $2,450.5 on the London Metal Exchange (LME), Copper was at $9,545, and Zinc at $2,658.5. On the bourses, however, the Nifty Metal index has rallied 10 per cent on the National Stock Exchange (NSE) since the announcement, as against the Nifty50's rise of 0.38 per cent. In May so far, the index has gained 7 per cent as against a 2.7-per cent rise in the benchmark index. "Demand trends in China, coupled with the renewed strength in the US dollar, may lead to short to medium term pressure on the metal prices," said Gaurang Shah, head investment strategist, Geojit Financial Services. Silver lining That said, the outlook for domestic metal stocks, analysts believe, remains positive from a long-term perspective. "Robust demand from infrastructure and real estate, back home, may offset weakness in global demand. These two sectors are the largest consumers of metals, both ferrous and non-ferrous," said Gaurang Shah of Geojit. He added: Some upward revision is expected for metal prices. More importantly, the input cost, which was an issue in earlier financial years, has now been lowered. So the profit margins could improve in the long-term. Investment strategy Shah recommends investors to bet on metal stocks from a long-term perspective. He remains upbeat on Tata Steel, JSW Steel, Hindalco, Vedanta, GSPL, and NMDC. Bathini suggests 'buying metal stocks on dips'. He is positive on Hindalco, Vedanta, and JSW Steel.
Business Standard
14-05-2025
- Business
- Business Standard
Nifty Metal index up 3% on 'lag effect' say analysts; Tata Steel climbs 5%
Metal stocks glittered in trade and gained up to 5 per cent on Wednesday, May 14, 2025. The Nifty Metal index, which tracks the performance of the metal and mining sector in India, rose 2.8 per cent, registering the day's high at 9,085.05. At 10:09 AM, all 15 constituents on the Nifty Metal traded positive. Among others, Tata Steel stock was the top gainer rising over 4 per cent, followed by Lloyds Metal and Energy gained 4.16 per cent, National Aluminium Company rose 4.14 per cent. Jindal Stainless and Steel Authority of India (SAIl) was up over 3 per cent. NMDC, Hindalco, Vedanta, Jindal Steel, and Power were up over 2 per cent. Why are investors buying metal stocks? According to analysts, metal stocks are rising amid easing trade tensions between the US and China. "Metal index is on its upward trajectory as geopolitical tensions have been de-escalating and also, the trade negotiations between US and China are going in a very positive direction," said Kranti Bathini, Director - equity strategy, WealthMills Securities. He added: Nifty Metal was in a consolidation phase recently. Echoing a similar view, independent market expert Ambareesh Baliga said that fear of dumping metal stocks is out as trade war worries are softening. Additionally, according to reports, financial institutions are rethinking their China calls after a trade truce and have lifted China's growth outlook which has also boosted sentiments. ALSO READ | Why are metal stocks volatile since the US-China trade deal on Monday? The US and China reached a temporary 90-day truce on tariffs earlier this week. Under the deal, the US will reduce recent tariffs on Chinese imports from 145 per cent to 30 per cent, while China will lower its duties on US goods from 125 per cent to 10 per cent. On Monday, Nifty Metal gained over 5 per cent on the back of US-China trade deal development. However, it slipped nearly 1 per cent on Tuesday. The rise in metal stocks today is due to a 'lag effect', according to Bathini. A 'lag effect' in the stock market refers to a delay between a cause and its observable impact on stock prices. This can happen as traders and investors may have some other better bet than a specific sector. ALSO READ | US-China trade tariff details Since returning to the White House in January, US President Donald Trump launched a flurry of aggressive trade measures that jolted financial markets and ratcheted up recession fears. The duties, which are designed to narrow the US trade deficit, hit China particularly hard. Trump had imposed tariffs of up to 145 per cent on Chinese imports, prompting Beijing to respond with retaliatory curbs of its own, including restrictions on some rare earth elements.
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Business Standard
14-05-2025
- Business
- Business Standard
Micro, small, midcap indices outrun Nifty 50 in recent market pullback
Micro, small, midcap indices on the National Stock Exchange (NSE) have outperformed the Nifty 50 in recent market pullback triggered by the India – Pakistan truce on the boarders, shows data from ACE Equity. While the Nifty Microcap 250 index has rallied around 6 per cent from its closing level on Friday, May 9 till May 13, the Nifty Smallcap 100 and the Nifty Midcap 150 indices have moved up 5 per cent and 4 per cent respectively during this period, shows ACE Equity data. In comparison, the Nifty 50 index has gained 2.4 per cent. (See graphic below) The outperformance in a lot stocks from the micro, small-and midcaps, said Kranti Bathini, Director-Equity at WealthMills Securities, has been on account of a positive earnings surprise in the March 2025 quarter (Q4-FY25). 'Mid-and smallcaps had been in a consolidation phase since long. Q4FY25 earnings for a lot of companies in these segments surprised positively, which triggered an up move. Though one cannot paint the entire sector with the same brush, it is advisable to take some profit off the table right now. Valuations for some of the stocks in the micro, small-and midcap baskets is still steep and prone to a correction. One has to be stock specific from here on,' he said. Microcap, Midcap, Smallcap indices At the stock level, Tanla Platforms, Syrma SGS Technology, Bharat Dynamics, Olectra Greentech, Nippon Life India Asset Management, The Jammu & Kashmir Bank, Reliance Power and Escorts Kubota gained between 11 per cent and 19 per cent during the recent market pullback, data shows. K.P.R. Mill, Jyothy Labs, United Breweries, Navin Fluorine International, Chambal Fertilisers and Chemicals and UPL Ltd., on the other hand, lost ground. The Nifty 50, according to analysts at IDBI Capital, is trading near one standard deviation above its 10-year average based on one-year forward earnings per share (EPS) estimates. 'In the absence of strong domestic catalysts and amid external policy risks, we expect the market to remain range-bound in the short term. As a result, we anticipate a more stock-specific environment going forward, where select stocks will outperform,' wrote Pravin Bokade and Shreejit Nair of IDBI Capital in a recent note. Technical view on the markets Those at Angel One, too, remain constructive on the markets and suggest investors adopt a 'buy on dips' strategy. Technically, considering the retracement of Monday's rally (from Friday's low), the 61.8 per cent level around 24330, which also marks the start of the bullish gap left, is seen as a crucial support for the Nifty 50 index now. A breach below this level could see the ongoing up-move fizzle out. The 50 per cent retracement at 24,450 levels serves as immediate support for Nifty 50. "On the upside, 24750 and 24900 are the key resistance levels to watch. Traders can continue to focus on mid-and small-caps, but should adopt a selective approach," advises Sameet Chavan, head of research for technical and derivatives at Angel One.
