Nifty Metal Index to Recover on Friday as Crude Oil Prices Fall
The Nifty Metal index is set to recover on Friday after a modest correction on Thursday. The index, which serves as a primary reference for metals trading, fell by 0.3% on Thursday due to profit-booking from the prior session's gains.
The sharp drop in crude oil prices on Thursday, however, provides significant relief to metal smelters and manufacturers. Crude oil prices fell by 1.88% to Rs 7,779 per barrel, reducing energy costs for metal smelting operations. This is expected to improve the margins of Hindustan Zinc and Hindalco Industries, two prominent players in the industry.
Ankit Jaiswal, a senior research analyst at Univest, notes that the reduction in smelter energy costs will partially offset the metal price corrections experienced on Thursday. Kunal Singla, associate director at Univest, highlights the ongoing supply deficit in zinc, citing the maintenance of the Zhuzhou smelter in China as the primary driver.
The Nifty Metal prediction for tomorrow is shaped by these twin macro developments: the sharp drop in crude oil prices and the recovery of the IT sector. The Indian markets are expected to track global cues, with China's PMI construction data being a key factor in determining metal demand.