Metal stocks shine on China PMI report

After the release of positive manufacturing data by Chinese government, the metal stocks rallied with boosting domestic investor confidence. As a reaction to the news, S&P BSE Metal index went up by 5.36 per cent.

Coronavirus outbreak was witnessed in Chinese city of Wuhan belonging to Hubei province. Since China is the world’s largest producer of industrial metals, the shutdown of manufacturing facilities, forced by COVID-19 pandemic, led to the overall supply-demand disruptions. However, since the last week, China can be seen getting back to normalcy with a majority of the businesses resuming their operations. Consequently, most factories in China are almost fully back to work, according to data released by Chinese authorities. China's official manufacturing purchasing managers' index (PMI) bounced to 52 in March, which was up from a record-low of 35.7 in February and topping forecasts of 45. A number above 50 on the index indicates a growing activity but many feel that the figure could be overstating the improvement, since the data comes just after the companies resumed operations after a forced full stoppage.

Reacting to this news, on Tuesday, the metal stocks closed in green with Vedanta-up by 5.11 per cent, Hindalco Industries-up by 7.77 per cent, Jindal Steel & Power-up by 2.69, JSW Steel-up by 2.92, Steel Authority of India-up by 13.27 per cent, NMDC-up by 3.51 per cent and Coal India-up by 5.07 per cent.