Metal stocks take the blow as tariff war fears intensify

Mumbai: Metal shares tumbled connected Friday, emerging arsenic the biggest losers successful the day's trading, connected heightened concerns that request would instrumentality a deed if the ongoing tariff war betwixt the US and China led to a crisp downturn.

The Nifty Metal index plunged 6.6%-its worst time since the announcement of wide predetermination results successful June 2024.

Hindustan Copper was the apical loser connected the index, falling 8.9%. National Aluminium Company (Nalco), Tata Steel, Vedanta and Hindalco, each down implicit 8%.

"The large interest for the metals assemblage is simply a planetary slowdown successful commercialized station the implementation of these tariffs, which tin bring down the request for concern goods, including metals," said Apurva Sheth, caput of probe astatine Samco Securities.

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Sheth said if the US enters a recession, determination whitethorn beryllium a slowdown successful request successful India arsenic well, which tin wounded this sector.

The US imposed tariffs of 26% connected Indian imports connected Tuesday.

The import tariffs successful the US person triggered worries astir the dumping of products into countries similar India.

"The US imposed a 25% tariff connected alloy and aluminium imports from China, Japan and South Korea, and this whitethorn punctual these countries to divert their exports to India, hurting home producers," said Arijit Malakar, equity probe expert astatine Ashika Stock Broking.

Sheth said the authorities volition support an oculus connected immoderate dumping of goods but successful the abbreviated to mean term, the stocks are apt to beryllium nether pressure, and could carnivore the brunt of the tariff chaos.

What should investors do?
"We would suggest investors enactment distant from this assemblage until much clarity emerges," said Sheth.

Malakar said a slowdown is imminent successful the US, arsenic mounting up manufacturing plants volition instrumentality a fewer years, and higher costs of accumulation whitethorn wounded firm earnings, user demand, oregon both.

The Nifty Metal scale is down 2.6% this twelvemonth arsenic against the Nifty's driblet of 3.5%.

"While the full metals handbasket whitethorn beryllium wounded by a slowdown, companies similar Tata Steel and Hindalco, which person precocious US export exposure, whitethorn fare worse. Currently, we judge that National Aluminium, JSW Steel and Hindustan Zinc, which cater chiefly to home request whitethorn beryllium amended placed than others," said Malakar.

Parthiv Jhonsa, pb analyst-metals and mining astatine Anand Rathi Institutional Equities, said the correction metallic shares connected Friday is simply a knee-jerk absorption to the tariff news.

"We bash not spot a slowdown successful request for metals successful India. We judge that companies focused connected home markets oregon those with important vulnerability to the Indian marketplace are amended positioned successful the coming months, considering the existent planetary uncertainties," helium said.