Metal meltdown in recent sell-off

Key losing sectors include capital goods, mining, as well as oil and gas

Since the start of the Chinese currency devaluation in early August, four sectors - metals and mining, capital goods, oil and gas, and automobile - have been the biggest losers, with the respective stocks shedding 11 to 16 per cent. Among the four, the BSE metal index lost the most in the foreign institutional investor sell-off, falling 16 per cent over the last month and a half, which is double the losses sustained by broader markets.

The underperformance is due to demand concerns from China, leading to lower metal prices. In Hindalco, investors lost 30 per cent. While most steel majors are hit due to soft domestic demand and weak prices, Steel Authority of India has been hit more versus Tata Steel or JSW. Among mining majors, there is pressure on Coal India on account of lower demand and weak pricing, with investor sentiment getting hit further by the government's plan to sell stake in the company. Capital goods companies have been underperforming on weaker June quarter earnings.The US central bank's decision on interest rates, actions by China and India's call on rates will affect stocks.