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Metals Stocks Gained on Rising Commodity Prices India's small and mid-cap metal and mining stocks are making a comeback. In past two months. Sarda Energy share price rallied 42%, Moil share price zoomed 35%, GMDC share price surged 34%, Prakash Industries share price jumped 22% and NALCO share price moved up by 21%.

Indian Metal outlook Largecap metal stocks picked up steam since the demand for metals in China stabilized and the scope of infrastructure development in India has increased. Hindalco, Vedanta, Tata Steel and Hindustan Zinc nearly doubled their market cap in the past nine months. Globally, industrial metals have rallied almost 30% in 2016 and there is no stopping this overwhelming rally for now.

Rising demand for Metals in Global market On Tuesday, the Bloomberg Industrial Metals sub-index posted its biggest five-day increase since 2011, as zinc touched a nine-year high. Prices rallied after China's top economic commission permitted a $36-billion plan on new rail links around Beijing, enhancing demand for industrial raw materials. Market experts says that Small and mid-cap metal stocks were substantially beaten down for the past couple of years and they are just coming to terms with the recent rally in base metal. They will wait to see substantial pick up in global demand and may continue its rally further. Metals and Mining is a fairly unorganized sector. The cash dealings make the chances of defaulting high in this space. However, if the Demonetization effect gets the sector into the digital payment process, it might end up gaining even more. Listed companies who are willing to work in an organized market may be highly benefitted as the chance of default will be significantly reduced.


Commodities and Stocks:

Commodity Prices:

Copper Nickel Lead Zinc

Metal Stock Prices:

2/29/2016

11/29/2016

% rise

4645 8400 1729.5 1743

5739.5 11150 2353 2735

23.56% 32.74% 36.05% 56.91%

Tata Steel JSW Steel Vedanta Hindalco NMDC SAIL Jindal Steel Nalco

2/29/2016 11/29/2016 % rise 64.17% 249.1 408.95 50.69% 1,126.45 1,697.45 223.72% 70.6 228.55 155.12% 68.75 175.4 30.79% 92.7 121.25 45.70% 34.9 50.85 32.11% 53.4 70.55 75.07% 32.9 57.6

Commodity prices in China have been increasing gradually and so has the prices of the Metal stocks. Since February 29th 2016, prices of Copper, Nickel, Lead and Zinc have surged anywhere from 20% to 30%. Simultaneously, Tata Steel share price gained 64.17% and JSW Steel share price surged 50.69%. Tata Steel uses Zinc and alloys as raw material apart from Iron ore, coke and coal. However, Vedanta share price gained the most 223.72% during 29th February to 29th November this year. Hindalco share price followed, gaining 155.12% during the span. Vedanta and Hindalco have Copper and Alumina as their primary raw material. All the four stocks the stocks are top 500 recommendations by Dynamic Levels. NALCO share price surged over 75% while Zinc led the 46% rise in SAIL share price. Although Caustic soda is the major component of NALCO products, it also uses Aluminium Fluoride. NALCO is the Multibagger recommendation by Dynamic Levels. The rally according to the analysts is not going to halt anytime soon. So, if you have an eye on the sector, this is the best time to enter into the Metal market.


Disclaimer The investment advice or guidance provided by way of recommendations, reports or other ways are solely the personal views of the research team. Users are advised to use the data for the purpose of information and rely on their own judgment while making investment decision. Dynamic Equities Pvt. Ltd - SEBI Investment Advisory Reg. No.: INA300002022

Disclosure Dynamic Equities Pvt. Ltd. is a member of NSE, BSE, MCX SX and a DP with NSDL & CDSL. It is also engaged in Investment Advisory Services and Portfolio Management Services. Dynamic Commodities Pvt. Ltd., associate company, is a member of MCX & NCDEX. We declare that our activities were neither suspended nor we have defaulted with any stock exchange authority with whom we are registered. SEBI, Exchanges and Depositories have conducted the routine inspection and based on their observations have issued advise letters or levied minor penalty on for certain operational deviations. Answers to the Best of our knowledge and belief of Dynamic/ its Associates/ Research Analyst: DYNAMIC/its Associates/ Research Analyst/ his Relative:      

Do not have any financial interest / any actual/beneficial ownership in the subject company. Do not have any other material conflict of interest at the time of publication of the research report Have not received any compensation from the subject company in the past twelve months Have not managed or co-managed public offering of securities for the subject company. Have not received any compensation for brokerage services or any products / services or any compensation or other benefits from the subject company, nor engaged in market making activity for the subject company Have not served as an officer, director or employee of the subject company

Article Written by Tanaya Nath

Metals and mining  
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