Mumbai
Metal stocks outperformed in Thursdays trade on uptick in global metal prices, with the BSE Metal index surging 4.5% to 14828.33-its highest closing level since March 1.
Hindalco Industries was the best gainer on the metal index, surging 9.1% to Rs 264.75 followed by National Aluminium Company, Vedanta and JSW Steel which rallied 4.3-9.0%.
The BSE Metal index is down 0.7% for the current calendar year 2018, underperforming the benchmark 30-share Sensex which is up 1.1% so far this year.
The rise in Thursdays session came after aluminium prices hit their highest level in nearly seven years the previous day on growing supply concerns after US sanctions on Rusal. Nickel prices have rallied to over three year highs on growing concerns over US sanctions to Russia.
Edelweiss Securities sees Hindalco Industries as one of the beneficiaries of the surge in aluminium prices. The brokerage has a buy rating on Hindalco Industries with a target price of Rs 325. The brokerage also has a buy recommendation on Vedanta with a target price of Rs 425.
“We believe the current upswing in LME Al price is likely to benefit integrated players Hindalco, Alcoa and South32 the most. While risks of potential supply ramp up from China persist, we believe, in the near term, LME Al integrated players and US convertors will outperform,” said Edelweiss in a note dated April 17.
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