Indian metal stocks rallied on Wednesday after China adjusted its budget mid-year to provide additional stimulus. The Nifty Metal rose as much as 1.78% so far in the day.
The world's second-largest economy's fiscal deficit ratio has been raised to about 3.8% of GDP from 3%, including an additional sovereign debt issuance worth 1 trillion yuan, or $137 billion, in the fourth quarter, to support disaster relief and construction.
China's stimulus measures affected Indian metal stocks since the country produces and consumes almost half of the global metal supply, thereby affecting global metal prices.
The country has rarely adjusted the budget mid-year, having previously done so in periods including 2008, in the aftermath of the Sichuan earthquake, and in the wake of the Asian financial crisis in the late 1990s. The economic stimulus comes at a time when China's property woes have intensified, with home sales dropping faster in September than August this year.
The aid is part of a push to help the nation reach the official government growth goal of 5% in 2023. The country's GDP rose 4.9% year-on-year in Q3 and 5.2% YoY in the January–September period.
Among Indian metal stock, so far in the day, shares of Jindal Steel and Power Ltd. rose the most at 3.12%, followed by Hindalco Industries Ltd. which was up 3.08%.
APL Apollo Tubes Ltd. fell the most at 1.38%.
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