Nifty Metal erases 5k, index tumbles 3% as commodities price dive; Adani Enterprises shine; Vedanta, SAIL, JSW Steel top bears

Commodities prices especially nonferrous base metal are headed for their worst week since March 2021 after China decides to sell reserves.

Jun 18, 2021 01:06 IST India Infoline News Service

Bear Market
Nifty Metal has given up its over 5,000-level on Friday and was under steep selling pressure with the majority of stocks in the red. Commodities prices especially non-ferrous base metal are headed for their worst week since March 2021 after China decides to sell reserves.

Also, a strong dollar coupled with a hawkish stance and interest rate hikes outlook by the US Federal Reserve - led to dampening sentiments further in the sector. Overall, weak Indian markets benchmark also tamed the performance.

At around 1.26 PM, Nifty Metal was trading at 4,948.95 lower by 146.15 points or 2.87%. The index has touched an intraday high and low of 5,098.85 and 4,858.80 respectively.

Earlier this month, the index had touched a new all-time high of 5,524.25, however, has now scrapped its record levels and entered into a bearish trend.

On the index, Adani Enterprises is the only stock that is in the green surging by 5%. The stock has risen after a four consecutive days slip.

The remaining all stocks were on a downside move on the metal index.

Vedanta was the top underperformer tumbling 5.5% followed by SAIL and JSW Steel slipping by 5% and 4.7%, respectively. Tata Steel and NALCO dived more than 4% each. While JSPL dipped by 3.9% and Coal India plunged by 3.6%.

MOIL skid by 2.7%, while NMDC and Hindustan Zinc slumped more than 2% each. Hindalco tumbled by 1.7%.

Welspun Corp fell by 1.5%, while APL Apollo shed by 1.2%. Ratnamani weakened by 0.5%.

Three-month copper on the London Metal Exchange has slipped below $9,300 a tonne. The commodity has nosedived more than 7.2% so far in the week.

Meanwhile, the most-traded July copper contract on the Shanghai Futures Exchange dropped was near 67,110 yuan ($10,412.08) a tonne. This would be its lowest level since April 15 and also is on the track for a weekly drop.

On the other hand, the US dollar benchmark is moving towards its best week in nearly nine months due to sooner-than-expected closing to extraordinary U.S. stimulus in the days after a surprise shift in monetary tone from the country's Federal Reserve.

The selloff in commodities deepened after China said that they would begin to sell major industrial metals such as copper, aluminium and zinc from state stockpiles. This is China's effort to curb strong rally in commodities price after the domestic producers' factory gate prices shot to their fastest annual pace in more than 12 years - indicating global inflation pressures.

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