CHINA LIKELY TO INCREASE FISCAL STIMULUS TO BOOST ITS DOMESTIC CONSUMPTION
News: As per media sources, the Chinese government has pledged for more fiscal stimulus, including rate cuts and lowering reserve requirement for banks.
Views: This is a positive development for the domestic metal space given the stimulus will help boost the domestic consumption in China , which will likely limit the steel exports from the country. Consequently, this will provide a relief to domestic steel players given the rising imports from China have pushed the domestic steel prices to a three year low of ~₹48,000/tonne. Thus, we remain positive on the steel space with JSW steel remains our top pick due to its strategic capacity expansion, favourable steel demand domestically and anticipated profitability improvements.
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