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Metal Stocks on down trail, Nifty Metal Index crash down by 2.5%

by Psu Connect
Date: 13-12-24

Tata Steel, Vedanta, SAIL, and NMDC shares fell by up to 5%. At 9:50 AM, SAIL and NMDC led the declines, dropping by 4.6% and 4.5%, respectively.

Shares of metal companies, including SAIL, NMDC, JSW Steel, Tata Steel, and Vedanta crashed by 2-5% on Friday, December 13. The broader Nifty metal index fell around 2.5%, making it the top sectoral loser. After a strong gaining streak in recent weeks, from lows of around 8,700 in November to a high of about 9,600 this month—the metal index is now facing some correction. With today's fall, the metal index is now down over 10% from its all-time high level.

Tata Steel, Vedanta, SAIL, and NMDC shares fell by up to 5%. At 9:50 AM, SAIL and NMDC led the declines, dropping by 4.6% and 4.5%, respectively. JSW Steel, Tata Steel, and Hind Copper also experienced losses, each falling around 3%. Vedanta, Hindalco, and Hindustan Zinc slipped by approximately 2%.

Shares of NALCO, which had declined by 7% in the previous session, extended their losses by another 2% today. Additionally, NALCO shares are under a ban in the Futures and Options (F&O) trading segment today. A stock enters the ban period when its open interest (OI) exceeds 95% of the market-wide position limits (MWPL).

The ban is lifted only when the open interest falls below 80%. Among the 16 constituents, only Adani Enterprises was trading in the green during the morning session.

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The reason for the fall in metal stocks is investor concerns about China's stimulus plans, which could impact global metal demand, given China’s role as the biggest metal importer.

On Thursday, December 12, China vowed to increase the budget deficit, issue more debt, and ease monetary policy to support stable economic growth, especially as it faces increasing trade tensions with the United States with Donald Trump potentially returning to the White House.

In September, China’s central bank introduced its largest economic stimulus since the pandemic to boost the economy back towards its growth target. China's top leadership, including President Xi Jinping, promised rate cuts and reductions to the reserve requirements for banks during a two-day Central Economic Work Conference in Beijing, according to reports. If China alters its monetary policy, it would be the first time in 14 years.

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