Tata Steel shares soar over 5% amid rally in metal stocks; check key reasons

Metal stocks continued with their rally for the third consecutive session on Wednesday, September 3, with the Nifty Metal index gaining nearly 3%.

Last seen, the Nifty Metal index was trading at the 9,637.75 level, up 2.7%, with 14 out of 15 constituents of the index trading in the green.

Tata Steel was the biggest contributor to the index's rally—up 5.39%, followed by Jindal Steel (4.16%), SAIL (3.89%), Hindustan Copper (3.86%), Welspun Corp (3.43%) and JSW Steel (2.8%).

Further, shares of Nalco (2.68%), Hindalco Industries (2.62%), NMDC (2.1%), Vedanta (1.71%) and Lloyds Metals and Energy (1.16%) were also seen higher. Meanwhile, APL Apollo Tubes, Hindustan Zinc and Adani Enterprises also gained 0.68%, 0.39% and 0.13%, respectively.

Jindal Stainless (-0.61%) was the only losing stock on the index in the afternoon session.

Why are metal stocks rallying today?

People with knowledge on the matter told the news agency that the world's largest steel producer will strictly curb new capacity and reduce production. This move is expected to affect India by potentially reducing cheap steel imports into the country.

Market investors thus look optimistic towards the metal sector

With the rising tariff tensions and US President Donald Trump’s new Fed appointments, the US dollar is expected to weaken—which can lead to improved commodities demand globally.

This in turn can help the Indian metal companies with higher exports and better pricing.

On Wednesday, the rupee recovered 15 paise from its all-time low level to 88.00 against the US dollar in early trade as persistent foreign fund outflows and dollar strength weighed on investor sentiments.

The Indian economy grew by 7.8% in the April-June quarter of the current financial year 2025-26, aided by a robust performance of the services sector. The growth in real Gross Domestic Product (GDP) in Q1 of FY26 is higher than the 6.5% expansion recorded in the same period a year ago, the National Statistics Office (NSO) said.

The agriculture sector recorded a 3.7% growth, up from 1.5% in the April-June period of 2024-25. Manufacturing grew 7.7%, while construction expanded 7.6%. However, mining and quarrying contracted by 3.1%, and electricity, gas, water supply and other utility services registered a tepid 0.5% growth.

Experts believe that the strong GDP data are likely to boost investor sentiment, helping sectors like metal.

Many analysts have said that lower GST rates on real estate and construction can help buyers, which will benefit industries like metal and cement.