Nalco and DLF Lead 5% Surge in Metal and Real Estate Stocks: Key Drivers Behind the Rally
Shares of metal and real estate companies surged on September 2, supported by multiple positive triggers. Discover the key reasons behind this significant rally.
Metal StocksReal Estate StocksFed Rate CutGdp GrowthGst ReformsReal EstateSep 02, 2025
By 12:10 pm, the Nifty Metal index was up 1.3% at 9,426, while the Nifty Realty index gained 1.33% to 891.50. Analysts have identified five key factors driving this surge.
Fed Rate Cut Hopes
On August 22, Federal Reserve Chair Jerome Powell indicated that the weakening US job market could soon compel the Fed to cut interest rates. At the Jackson Hole Economic Policy Symposium, he noted that “downside risks to employment are rising.”
Investors now widely expect a 25-basis-point cut in the upcoming Fed meeting scheduled for September 16–17. A US rate cut would lower borrowing costs for foreign investors, making India an attractive destination for higher growth. This directly supports real estate and metal counters. There is also an expectation that the Reserve Bank of India (RBI) may follow suit, further boosting market sentiment.
GST Reforms on the Horizon
The Goods and Services Tax (GST) Council, chaired by Finance Minister Nirmala Sitharaman, will meet in New Delhi on September 3–4 to discuss a simplified two-rate structure of 5% and 18%.
According to Pradeep Aggarwal, Chairman of Signature Global (India) Ltd, the move would ease compliance for real estate developers, rationalize input costs, improve cash flows, and eventually reduce home prices. Market experts believe this could provide a significant boost to the housing sector.
Strong Q1 GDP Numbers
India’s GDP grew 7.8% in Q1 FY26 (April–June), the fastest pace in five quarters. The reading surpassed the RBI’s 6.5% projection, as well as the 6.6% median estimate in a market poll.
This figure also bettered the 7.4% growth in Q4 FY25 and the 6.5% growth in Q1 FY25, signaling resilient economic momentum. The stronger-than-expected GDP print boosted investor confidence, particularly in cyclical sectors such as metals and real estate.
Weakening Dollar
The US dollar is hovering near multi-month lows, pressured by expectations of Fed rate cuts and a softening labor market. Analysts at DBS noted that Trump’s new Fed appointments could further weigh on the greenback.
A weaker dollar tends to boost demand for commodities like metals, improving export opportunities and pricing power for Indian companies in the sector.
China to Cut Steel Output
China plans to reduce steel production between 2025 and 2026, aiming to address overcapacity that has dragged global prices. The cut would reduce the supply of cheap metals flooding into India, benefitting domestic metal producers.
Stock-Specific Gains
Among metals, NALCO jumped nearly 5% to lead the index, followed by NMDC with a 4% rise. Other gainers included Hindustan Copper, SAIL, Tata Steel, APL Apollo Tubes, Hindustan Zinc, and JSW Steel, which climbed up to 3%.
In real estate, Phoenix Mills rose 3.5% to trade at ₹1,570, while Anant Raj and DLF gained up to 3%. Godrej Properties, Oberoi Realty, and Raymond advanced nearly 2% each.
The positive momentum in these sectors is expected to continue as the market responds to these favorable developments.
Frequently Asked Questions
What is the Nifty Metal index, and why is it important?
The Nifty Metal index is a benchmark that tracks the performance of metal stocks listed on the National Stock Exchange (NSE) in India. It is important because it provides a gauge of the health and performance of the metal sector in the Indian stock market.
How does a Fed rate cut impact the Indian stock market?
A Fed rate cut typically lowers borrowing costs for foreign investors, making India an attractive destination for higher growth. This can boost the Indian stock market, particularly in sectors like real estate and metals.
What are the expected outcomes of the GST reforms for the real estate sector?
The expected outcomes of the GST reforms include easing compliance for real estate developers, rationalizing input costs, improving cash flows, and eventually reducing home prices. This could provide a significant boost to the housing sector.
Why is a stronger GDP growth important for the stock market?
A stronger GDP growth indicates a robust and resilient economy, which can boost investor confidence. This is particularly beneficial for cyclical sectors like metals and real estate, as it suggests increased demand and better economic conditions.
How does a weaker US dollar affect the metal sector in India?
A weaker US dollar tends to boost demand for commodities like metals, improving export opportunities and pricing power for Indian companies in the sector. This can lead to increased profits and stock performance for metal companies.
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