Mining, Metal Stocks Gain On Weak Dollar

Mining and metal stocks gained on Tuesday amid a global rally in base metal prices after the US dollar fell to a three-week low against a basket of global currencies. 

GMDC, Jindal Stainless, Hindalco, MMTC, Moil, NMDC, Nalco, and Vedanta gained between 0.5-1.5 per cent today. The metal sub-index of Bombay Stock Exchange - BSE Metal - was up 0.42 per cent compared to 0.29 per cent gain in the broader Sensex. 

Global commodity prices firmed up after the US dollar fell nearly 0.2 per cent to a three-week low yesterday. Including yesterday's loss the dollar has corrected nearly 2 per cent in last two days and 5 per cent in this year so far. As global commodity prices are quoted in US dollar, a fall in the dollar leads to a gain in metal prices. 

Overnight, global iron ore prices gained 2 per cent, while copper and silver prices rose 0.3 per cent and 0.2 per cent respectively. This had triggered a rally in global mining stocks yesterday. Rio Tinto jumped 5.2 per cent, while BHP Billiton, Anglo American, Vedanta PLC rose between 5-11 per cent.