Metal and Real Estate Stocks Surge: Fed Rate Cut Hopes and More
Shares of metal and real estate companies saw a significant rise on September 2, driven by factors like US Fed rate cut expectations, GST reforms, and strong GDP numbers.
Metal StocksReal Estate StocksFed Rate CutGst ReformsGdp GrowthReal EstateSep 02, 2025
The Nifty Metal index rose 1.3 percent to hover around 9,426, and the Nifty Realty index gained 1.33 percent to 891.50, as seen at 12.10 pm. Here are 5 possible triggers for the sharp rise in the stocks:
US Fed Rate Cut Hopes
Federal Reserve Chair Jerome Powell on August 22 said that the weak job market may soon force the American central bank to cut interest rates. 'Downside risks to employment are rising,' according to Powell's remarks at the Jackson Hole Economic Policy Symposium. Most investors now expect a 25-basis-point Fed rate cut during its upcoming meeting, which is scheduled between September 16 and September 17. A rate cut in the US could reduce borrowing costs for foreign investors, encouraging them to invest in higher growth markets in India. This boosts real estate and metal stocks. Additionally, investors expect the RBI to follow the Fed in the pursuit of a rate cut, if any. This too can positively impact the stocks.
GST Reforms
The GST Council, chaired by Finance Minister Nirmala Sitharaman, is slated to meet in New Delhi on September 3-4 to deliberate on the Centre's proposal for a simplified two-rate structure of 5 percent and 18 percent. According to market experts, this simplicity in the tax structure will reduce the cost of developers and benefit homebuyers. Pradeep Aggarwal, Founder & Chairman, Signature Global (India) Ltd said that the housing sector stands to benefit from these reforms, as moving to a two-slab structure will not only make GST compliance easier for real estate developers but also help rationalise input costs, improve cash flows, and eventually reduce the cost of homes for buyers.
Strong Q1 GDP Numbers
The Indian economy grew 7.8 percent in the April-June quarter of the ongoing financial year. This is the highest growth recorded in five consecutive quarters, beating economists' estimates. Gross domestic product (GDP) topped both the RBI's 6.5 percent projection and the 6.6 percent median recorded in a Moneycontrol poll. The GDP growth was also stronger than the 7.4 percent rate recorded in the preceding three months (Q4 FY25) and 6.5 percent recorded a year earlier (Q1 FY25). The strong GDP numbers may have spurred confidence in the Indian economy's growth, which in turn boosted the real estate and metal stocks.
Weak Dollar
The US dollar is hovering near a multi-month low. Trump's appointments to the Fed are likely to further weigh on the dollar, according to DBS. 'Already, the labour market is softening, and Chair Powell has signalled the possibility of rate cuts at Jackson Hole,' the analysts wrote. 'This means that the overvalued USD could ease again as markets anticipate coming Fed rate cuts.' A weaker dollar improves global demand for commodities, like metals, which in turn benefits Indian metal companies through higher export opportunities and better pricing.
China Aims to Cut Steel Output
China aims to cut steel production between 2025 and 2026, according to an official document reviewed by Reuters. The country's move aims to tackle overcapacity that has hit prices significantly. Reduced steel output from China will reduce dumping of cheap metals into the Indian market, which in turn will benefit the Indian metal companies.
On the metal index, National Aluminium Company (NALCO) shares gained nearly 5 percent to emerge as the top gainer. NMDC shares followed, rising nearly 4 percent. Hindustan Copper, Steel Authority of India (SAIL), Tata Steel, APL Apollo Tubes, Hindustan Zinc, and JSW Steel shares gained up to 3 percent.
On the real estate index, Phoenix Mills shares gained 3.5 percent to trade at Rs 1,570 apiece and emerge as the top gainer. Anant Raj and DLF shares jumped up to 3 percent. Godrej Properties, Oberoi Realty, and Raymond shares gained nearly 2 percent each.
Frequently Asked Questions
What triggered the rise in metal and real estate stocks?
The rise was triggered by factors like US Fed rate cut hopes, GST reforms, strong Q1 GDP numbers, a weak dollar, and China's aim to cut steel output.
How does a US Fed rate cut affect Indian stocks?
A US Fed rate cut reduces borrowing costs for foreign investors, encouraging them to invest in higher growth markets like India, which boosts real estate and metal stocks.
What are the benefits of the proposed GST reforms for the real estate sector?
The proposed GST reforms, including a simplified two-rate structure, will make compliance easier for developers, rationalise input costs, improve cash flows, and reduce the cost of homes for buyers.
What impact did the strong Q1 GDP numbers have on the market?
The strong Q1 GDP numbers, recording a 7.8 percent growth, boosted confidence in the Indian economy's growth, which in turn positively impacted real estate and metal stocks.
How does a weaker US dollar benefit Indian metal companies?
A weaker US dollar improves global demand for commodities like metals, leading to higher export opportunities and better pricing for Indian metal companies.
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