NEW DELHI: Metal company shares rallied as much as 7% on Tuesday after China’s central bank announced a slew of measures to boost its ailing economy, especially the highly impacted property market which has caused immense pain to steel and metal companies worldwide. The world’s second-largest economy is expected to lower outstanding mortgage rate and reduce down payment required for buying a second home.
Shares of National Aluminium Company (NALCO) surged 6.64% on Tuesday to Rs 192.2 while heavyweights Tata Steel and Hindalco closed the session with a gain of over 4% each. NMDC, SAIL and Vedanta gained between 3 and 4% each. Sectoral benchmark Nifty Metal closed nearly 3% higher at 9,735.4. NSE Nifty50 closed flat at 25,940.40.
Parthiv Jhonsa, lead analyst (metal and mining), Anand Rathi Institutional Equities, said the Chinese government is likely to lower outstanding mortgage rate and reduce down payment required for second home purchases.
Additionally, there may be opportunities to renegotiate or refinance existing mortgages among banks and the government plans to enhance its re-lending programme for state-owned firms to help absorb unsold property inventories.
“Historically, while a rebound in metal prices is anticipated in the short term, it has often fallen short of expectations,” added Jhonsa.
Sensex hits 85,000 level for first time
NEW DELHI: Benchmark Sensex scaled the 85,000 level and Nifty breached the 26,000 mark for the first time before paring gains to close flat in a volatile session on Tuesday, dragged by losses in FMCG and select banking shares. ENS