NFL, FACT, RCF, other fertiliser stocks zoom up to 20%; here's what's fuelling the rally

About this update from Rashtriya Chemicals & Fertilizers Ltd.

Fertiliser stocks including state-run National Fertilisers (NFL), Chambal Fertilisers, RCF and others zoomed up to 20 percent, extending the previous session's gains, boosted by reports of a proposal to remove Goods and Services Tax (GST) on the fertilisers.The first GST Council meeting of Modi Government 3.0 is scheduled to be held on Saturday (June 22) where a decision may be taken to remove fertilisers from within the ambit of GST.This is because the Fitment Committee has proposed to exempt fertilisers from GST. The committee has referred the matter concerning fertilisers to the Group of Ministers (GoM) for rate rationalisation. The committee believes that blanket exemption will lead to duty inversion.Follow our market blog to catch all the live actionThe sharp uptick is also driven by market optimism over the MSP hike. The Union Cabinet recently announced the minimum support price (MSP) for 14 Kharif-season crops, including paddy, ragi, bajra, jowar, maize, and cotton.Investors expect that the increase in MSP will improve farmers' purchasing power, thereby encouraging them to invest more in agricultural inputs such as fertilisers.Select fertiliser stocks are showing bullish structural confirmation in long-term charts, attracting strong attention. The sector, which has exhibited mixed performance in recent years, is currently displaying the first signs of leadership in the high-beta sector, said Nuvama Institutional Equities in a report."There are initial signals indicating base formation observed over the past few months, along with improvement in relative performance and a visible accumulation phase," the brokerage said, highlighting that the basket of stocks has formed higher tops and bottoms on medium-term charts, suggesting a probable trend change and the resumption of the uptrend.Bull rally in fertiliser sector?Chambal Fertiliser stock was trading 16 percent higher. In the past, the stock has doubled within 16-18 months of breaking above the 52-week highs. The current setup points to a strong uptrend with the formation of a reversal candle and momentum indicators confirming a new high for the stock, said Nuvama.National Fertilizer Ltd (NFL) stock was up 18 percent. The price has exceeded the falling trendline drawn from the recent peak. The stock has been in the consolidation phase for the past few weeks and has absorbed the selling pressure in w...

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