Metal stocks see selling pressure today

6 Feb 2023 , 04:05 PM

Metal stocks are on a declining trend today. By 3 p.m. Nifty metal & minerals index was down by 1.86%. The list of top 20 losers by this time, at Nifty 50, included three metal stocks:  JSW Steel, Hindalco, Tata Steel. 

Adani Enterprises is one reason why the index is in the red today. Its stock price has come down by more than 2% today. The negative fallout of the Hindenburg research report continues for the stock today. Adani Enterprises is in the mineral business.  But one can clearly see that metal stocks too are also contributing to the decline in the index.  Tata Steel’s stock price is down by more than 2% today.  Hindalco’s stock price is down by more than 2%.  JSW Steel’s stock price is down by more than 3%. 

Tata Steel will be announcing its December quarter result later in the day. There is expectation that the company will post significant decline in its profits. A disappointing result from Tata steel can put further pressure on its stock and those of other metal companies.

Demand for metals go down when there is a global economic slowdown. In October 2022, India’s steel exports went down by 66%. Export duty imposed by the Government on some steel products also contributed to this decline in steel exports, along with global economic slowdown.  The ending of Covid restrictions in China also means more competition for Indian steel companies from their Chinese competitors, in the global market.