Metal Stocks Gain on Likely Trade Deal - The Economic Times
14-Dec-2019 10:17:13 AM
VEDANTA, HINDALCO, TATA STEEL RISE 2-4%Metal stocks surged on Friday after US President Donald Trump approved a phase-one trade deal with China. The BSE Metal index gained 2.3% with Vedanta, Hindalco Industries, Tata Steel and Steel Authority of India advancing 2-4%.
The US President signed off on a phase-one trade deal with China, averting the December 15 introduction of a new wave of US tariffs on about $160-billion worth of consumer goods from China. The tariff war between the two countries have affected the metal sector as it has depressed base metals prices and hurt business sentiments."The outlook for the sector has improved after the phase one trade deal, " said Abhimanyu Sofat, head of research at IIFL.
Pankaj Pandey, head of retail research at ICICIdirect, said domestic recovery is still tentative for metal companies."Metals are more of a trading bet because of valuations rather than a structural bet at this point, " said Pandey.Sofat of IIFL views the metals space as a contra play because of cheaper valuations and is bullish on Tata Steel.
The BSE Metal index has fallen 17% so far this year while the BSE Sensex is up nearly 14% so far this year.JM Financial is also bullish on Tata Steel and views it as a preferred play in the ferrous space.
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