Five reasons why all metal stocks but one are shining in Monday’s trade

The Nifty Metal Index is one of the top sectoral performers in Monday’s trading session, with 14 of its 15 constituents trading higher. Leading the gains were SAIL and JSW Steel, both up around 4%, while NALCO and Tata Steel also rose by approximately 2%.

Why are metals rallying?

1. Fed Rate Cut Hopes: Futures currently price in an 87% chance of a 25-basis-point rate cut by the US Federal Reserve in September 2025.

2. China’s Anti-Involution Drive: Regulatory efforts in China aimed at stabilising growth are supporting market optimism.

3. Stronger-than-Expected China PMI: Positive manufacturing data from China is lifting global metal demand expectations.

4. DGTR Safeguard Duty on Steel Imports: The Directorate General of Trade Remedies has recommended a three-year safeguard duty on steel imports: 12% in Year 1, 11.5% in Year 2, and 11% in Year 3.

5. Warming China-India Relations: Improved bilateral ties are expected to support trade and industry sentiment.

Additionally, global brokerage firm Morgan Stanley sees steel stocks outperforming. The brokerage has turned more constructive on the sector, citing expectations of expanding steel spreads and improving domestic demand.

Further, the “China anti-involution” theme will also support sentiment in global markets. With these drivers in play, Morgan Stanley has raised its steel price estimates by 3% each for FY27 and FY28.

– JSW Steel: Upgraded to Overweight, price target raised to ₹1,300.

– Tata Steel: Upgraded to Overweight, price target increased to ₹200.

– SAIL: Rating raised to Equalweight, price target increased to ₹140.

– Jindal Steel & Power (JSPL): Maintained Equalweight, price target lifted to ₹1,150.