Nifty Metal Index Snaps Three-Day Losing Streak on China’s Stimulus Hopes and Weakening US Dollar
The Nifty Metal index rebounded sharply on April 8, closing 1.5% higher at 7,965.60, after three consecutive sessions of losses. The rally was driven by emerging reports that China may unveil a stimulus package to support its domestic economy amid growing trade tensions with the United States, alongside a declining US dollar, which provided a favorable backdrop for commodity-linked sectors.
The index had previously suffered a nearly 7% drop, one of the steepest sectoral declines in recent sessions, as investors sold off metal stocks fearing a possible US recession and worsening global trade war dynamics triggered by recent protectionist policies announced by US President Donald Trump.
Nifty Metal Index closes 1.5% higher at 7,965.60
Index had fallen nearly 7% in previous three sessions
China’s potential economic stimulus supports demand outlook
Weakening US dollar improves metal export prospects
Adani Enterprises, JSW Steel, Lloyds Metals Lead Recovery
Among the standout performers on the metal index were Lloyds Metals And Energy, which rallied over 6%, followed by Adani Enterprises and JSW Steel, both registering gains close to 3%. The strong bounce was further supported by APL Apollo Tubes and Hindustan Copper, which also ended the day around 3% higher.
Broader participation across the sector was evident with Hindalco, Jindal Steel & Power, Jindal Stainless, and National Aluminum all gaining over 1%. Even Tata Steel, which had plunged 10% in the previous session and hit a lower circuit, managed to recover marginally, closing in the green.
Lloyds Metals up 6%
Adani Enterprises, JSW Steel gain nearly 3%
Hindustan Copper, APL Apollo up 3%
Tata Steel recovers after 10% plunge on April 7
However, Welspun Corp bucked the trend, falling nearly 3% to ₹770, as profit booking hit select mid-cap metal counters despite the broader positive sentiment.
China’s Trade Countermeasures and Stimulus Considerations Fuel Sentiment
According to Bloomberg, China is reportedly exploring frontloading economic stimulus to preemptively mitigate the impact of newly imposed US tariffs. This includes measures to support infrastructure, domestic manufacturing, and exports. The development follows China’s own announcement of a 34% retaliatory tariff on US imports after Trump’s imposition of reciprocal tariffs, including a 26% tariff on Indian goods.
The potential for Chinese demand revival, especially for industrial metals, and Beijing’s effort to stabilize its economy have helped restore optimism in the global metals trade. Meanwhile, the US dollar’s depreciation has made dollar-denominated commodities more attractive, aiding the rebound in international metal prices.
China may frontload stimulus amid tariff threats
34% retaliatory tariff by China targets US imports
Weak US dollar makes metal exports more competitive
Trade war escalation continues to create price volatility
Analysts Turn Selectively Optimistic Post Correction
According to PL Capital, the recent steep correction in metal stocks has created attractive valuations, especially for companies with higher domestic exposure, as India’s internal demand remains relatively unaffected by the global trade war. The firm believes the current dip offers a selective buying opportunity in structurally sound firms.
On the macro side, PL Capital also noted that the rationalization of Chinese steel capacity and previous US tariffs had propped up global steel prices, but warned that escalating trade measures could disrupt supply chains, fuel global inflation, and even lead to demand destruction.
PL Capital sees buying opportunity in domestic-focused metal stocks
Notes attractive valuations after steep correction
Warns of global slowdown risks and commodity volatility
Geojit: Trade War Risks May Persist, China Most Vulnerable
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, emphasized that while the recovery is welcome, the broader uncertainty and volatility are likely to persist. He suggested that the ongoing trade war may largely remain a bilateral affair between the US and China, as other economies including India and the EU are opting for negotiations.
He also warned that China is likely to face the worst brunt of the trade tensions and may attempt to offload excess inventory, particularly metal products, in global markets. This could depress international metal prices and affect exporters from India and other countries.
Trade war may remain focused on US-China axis
China likely to dump excess production, impacting prices
Volatility in metal sector expected to remain elevated
