Metal stocks are down significantly in trade today. Some of the counters like Hindalco, NALCO, Vedanta are down over 3% intra-day. In fact Hindalco is one of the biggest Index losers intra-day. Even if we track the share price of the metal stocks in recent times, the pain seems to be continuing. The BSE Metal Index is down 3% so far this year and if we see over 6 months, it is down over 14%.
Individually too metal stocks like Hindalco is down over 13% in the past 6 months. However, the stock is up 4% so far in 2025. In contrast, NALCO is down 14% in 2025 so far and Vedanta is down over 7% this year. All the three counters are down significantly in trade today.
3 reasons why metal stocks are falling today
There are three key reasons why metal stocks are under pressure today.
ALSO READHow will reciprocal tariff impact India? Nomura says … Trump signs memorandum restricting Chinese investment
US President Donald Trump had signed a memorandum last Friday restricting Chinese investment in strategic businesses. As per the Reuters report, he directed the US Committee on Foreign Investment with the same in the interest of protecting US national security interests from threats posed by foreign adversaries. This as a result, is seen as a negative for fund inflows to China and many experts believe could indirectly impact the industrial growth in the country. The metal stocks, given their direct linkages to Chinese market dynamics are seeing a domino impact. The lack of fresh stimulus from China is also weighing on sentiment.
Dollar strength
The dollar strength continues. The Dollar Index is trading around 106 levels. Though it is off its January highs of 110, the dollar Index is up 2.67% in the last one year. As a result of this, there are concerns about the metal stocks in the non-dollar denominated markets like India. A strong dollar also impacts the input price for these metals.
ALSO READRupee volatility more than halves Commodity price fluctuation
The fluctuation in commodity prices, especially base metals is also impacting the overall metal basket. Geopolitical tension, dollar strength and tariff concerns are some of the key reasons impacting the commodity prices along with concerns about climate change.
» Read More
