Coal fuels metal to shine: meanwhile Nifty reclaims 8,300

Nifty resumed 8,300 mark at the opening tick itself as the metal stocks pulled the benchmark indices upwards. Metals shined today for the second straight day after halting for previous couple of days. Metal stocks rose after a steep rise in the international coking coal prices to 200 Dollars a tonne in Q3FY17 from 92 Dollars a tonne in the previous quarter. 

Coking coal is a basic raw material for steel manufacturers; hence the steel manufacturers will enjoy the cushioning from increase in the imported coking coal costs led by transfer of low priced inventories. Subsequently, higher costs will lead to higher base metal prices and thereby higher earnings.

Domestic metal producers like JSW Steel, Bhushan Steel, SAIL, Jindal Steel and Tata Steel are the top metal gainers with gains ranging from 3.3-7.8 per cent. Nifty Metal index has managed to break out of the 52 week high level of 2,891 levels; the index it failed to cross earlier on December 9, 2016. With this we can talk of more upside for metals if index sustains above 2,890-2,891 on closing basis.