Market rout hits metal stocks; Hindustan Zinc down 7% today
What's the story
Shares of metal companies witnessed a major slump on Thursday, with the Nifty Metal index declining nearly 3% to 11,726. The fall ended a three-day winning streak for the sector. Leading players such as Hindustan Zinc and Vedanta saw their stocks plummet by nearly 7% and almost 5%, respectively. National Aluminium Company (NALCO) also witnessed a decline of around 4%.
Market impact
Other major players also see decline
Other major players in the sector weren't spared either. Hindustan Copper and Hindalco Industries saw their shares dip by nearly 3% each. NMDC and Lloyds Metals And Energy's stocks also fell around 2% each. Steel Authority of India (SAIL) and Tata Steel's shares fell over 1% each while JSW Steel and Adani Enterprises saw a decline of around 1%.
Market factors
Reasons behind the sharp fall in metal stocks
The sharp fall in metal stocks can be attributed to profit booking at elevated levels. The Nifty Metal index gained over 6% in the last three sessions, closing at 12,044.25 yesterday. Additionally, a stronger US dollar ahead of interest rate decisions from the European Central Bank and Bank of England also impacted these stocks negatively.
Price impact
Precious metals prices drop significantly
The fall in precious metals such as gold and silver also impacted the stocks of several metal companies. Gold futures with April expiry fell around 3% to ₹1,48,455 per 10gm on Thursday. Silver prices have also witnessed a dramatic fall, plummeting by as much as 16%. The white metal has now fallen below the $75 per ounce mark, reversing all gains made over the last two trading sessions.