Tata Steel and other metal stocks were on the rise after China announced stimulus for its struggling economy. 

What Happened: People’s Bank of China (PBOC) China's central bank on Tuesday said it will cut the reserve requirement ratio (RRR) for banks by 50 basis points or half a percentage point. This is the amount of cash the banks must keep in their reserves. Cutting the ratio down will put more money into the system. 

Additionally, the central bank will lower the seven-day reverse repurchase rate to 1.5% from 1.7%. 

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The slowdown in the Chinese economy has affected its demand for metals and the Chinese steel players were exporting their products for lower prices across the world markets. The weak steel prices have affected the performance of Indian steel companies.

Parthiv Jhonsa, lead analyst (Metal & Mining), Anand Rathi Institutional Equities said the measures might cause a rebound in metal prices in the short term, "It has often fallen short of expectations".

"We believe that the Chinese housing market has been struggling for the past four years, and unless there is stabilization in prices and a reduction in unsold inventory, any government initiatives will likely be inadequate. On the supply side, record inventories and increased output from some major global miners will continue to exert pressure on raw material prices.", Jhonsa added.

Price Action: Nifty Metal index rose 2% on Tuesday, becoming the highest-gaining sectoral index.'

Shares of Tata Steel surged 3.31% to ₹159.08. 

Shares of NMDC gained 3.78% to ₹223.53.

Shares of Hindalco Industries went up 1.79% to ₹702.90.

Shares of National Aluminium Company gained 5.19% to ₹189.60.

Shares of Steel Authority of India surged 3.45% to ₹134.16.

Shares of Vedanta went up 2.90% to ₹466.25.

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