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In the hope of increasing demand due to reduction in interest rates, metal stocks raised more than 3% in Tata Steel and JSPL – Metal Stocks Rise on Hopes of Increased Demand Due to Interest Rate Cuts Tata Steel and JSPL RISE More Than 3 percent

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In the leadership of the new RBI Governor Sanjay Malhotra, the first MPC has shifted the shares of metal companies after cutting 25 basis points in the repo rate on 7 February. After the shares of metal companies boom, the Nifty Metal Index rose 2 per cent to 8,551.55 around 11.18 am. Repo rate cuts are considered good for the development of infrastructure and real estate. This increases metal stocks due to the possibility of increasing demand. Metal is an essential raw material in the development of infrastructure and real estate.

Jindal Steel & Power shares rose by about 4 per cent to Rs 842 per share, while Tata Steel’s shares increased by more than 3 per cent to Rs 137 per share. Welpon Corp shares were also trading at around Rs 770 per share. While Adani Enterprises rose 2.57 per cent to Rs 2,371.80 per share. JSW Steel’s stock rose 2.55 per cent to Rs 972.60 per share.

Other shares that recorded a strong rise include National Mineral Development Corporation (2.33 per cent above), Vedanta (2.21 per cent), National Aluminum Company (about 2 per cent above). Shares of SAIL, Hindalco, Hindustan Copper and Jindal Stainless Limited were trading above 1 per cent above their previous closing levels. Shares of APL Apollo and Hindustan Zinc were also trading with a slight increase.

However, the shares of Ratnamani Metals & Tubes were trading at 2,796.05 with a decline of nearly 2 per cent. The RBI has reduced its repo rate to 25 basis points to 6.25 per cent. This is the first time cut after May 2020. The RBI has maintained its stance ‘Neutral’.

In May 2020, RBI had reduced the repo rate to 4 per cent to protect the economy from the influence of the Covid-19 epidemic. Since then, the central bank had increased the repo rate seven times to 6.5 percent.

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The RBI has estimated the GDP growth rate to be 6.7 per cent for the next financial year and has not made any changes in its forecast of inflation for the current financial year. This has maintained retail inflation estimate at 4.8 per cent.

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