Brokerages were bullish on steel stocks due to strong domestic demand and Chinese stimulus.

What Happened: The Nifty Metal index along with Nifty Pharma were the only sectoral indices that were trading in the black on Thursday as broader markets declined on Middle East conflict concerns.

Nifty Metal index were up 0.62% to 10,285.85 on Thursday while Nifty 50 was trading down 25,523.35.

What The Brokerages Said: Morgan Stanley said domestic inventory digestion has been muted while the China's recent stimulus will drive positive sentiment and support steel prices. The lower risk of Chinese imports would support spreads in the near term, the brokerage added. The research firm lifted estimates as it expects steel stocks to do well over the next few months. 

The brokerage upgraded Jindal Steel and Power to "overweight" call and raised the target price to ₹1,200. It upgraded JSW Steel to "overweight" call and hiked the target price to ₹1,150.  Tata Steel was upgraded to "equal weight" and the target price raised to ₹175. 

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Nomura also sees strong domestic demand and continued deleveraging to support Indian steel majors. The brokerage sees domestic hot rolled coil (HRC) prices to remain range bound in second half of FY25 and have marginal recovery in FY26. 

Nomura initiated coverage on JSW Steel with a "buy" call and target price of ₹1,220 and for Jindal Steel and Power, the brokerage also gave "buy" call with a target price of ₹1,200. 

Price Action: Shares of JSW Steel rose 2.52% to ₹1,053.20.

Shares of Jindal Steel and Power gained 1.69% to ₹1,052.85.

Shares of Tata Steel were up 1.28% to ₹169.17.

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