BSE Metal index jumps nearly 4%; SAIL advances 7%, Hindalco surges 6%

Topics Metal stocks | SAIL | Hindalco

SAIL sold 12.73 lakh tonnes in the domestic market while it exported 3.10 lakh tonnes of steel during July.
Shares of metal companies traded with decent gains on Wednesday with the S&P BSE Metal index advancing nearly 4 per cent to 8,254 levels in the intra-day trade. 

At 11:36 AM, the S&P BSE Metal index was ruling 3 per cent higher at 8,198 levels as compared to 0.4 per cent gain in the benchmark S&P BSE Sensex. 

Among individual stocks, Steel Authority of India (SAIL) gained 8 per cent to Rs 37.3 after the company on Tuesday informed it attained a sales volume of 15.83 lakh tonnes in July 2020, its best-ever performance in the month of July and a growth of about 50 per cent over July 2019 sales which was 10.59 lakh tonnes. 

The company sold 12.73 lakh tonnes in the domestic market while it exported 3.10 lakh tonnes of steel during July, attaining a growth of 29 per cent and 349 per cent, respectively over the corresponding period last year (CPLY). CLICK TO READ PRESS RELEASE

Besides, Hindustan Zinc, Hindalco, NALCO, and Tata Steel were up in the range of 6 and 4 per cent. 

Sajjan Jindal-led JSW Steel last week reported a consolidated loss before tax of Rs 643 crore in the June 2020 quarter, in stark contrast to a profit before tax of Rs 1,770 crore in the June 2019 quarter, with the pandemic disrupting operations for close to a month. Consolidated revenue for the period slumped 41 per cent year-on-year to Rs 11,454 crore. READ MORE

"While domestic steel players boast a unique advantage of insulation from robust international iron ore prices, we await an uptick in domestic demand, which would be another driver for stock prices/earnings growth," wrote Amit A Dixit and Meera Midha, research analysts with Edelweiss Securities in a note issued on July 29.  

The brokerage has reiterated the positive stance on the sector and maintains Tata Steel as its preferred pick in the space with a ‘BUY/SO’ rating and target price of Rs 450.

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