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Metals lose shine over global meltdown

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Atul Sathe Mumbai
Last Updated : Feb 21 2013 | 10:33 PM IST
Metal stocks were the weakest lot on the bourses on Wednesday owing to weaker metal prices in international markets.
 
The BSE Metals index declined 2.14 per cent against the Sensex fall of 0.37 per cent. Tuesday's global meltdown in metals is being attributed to this lacklustre performance by metal stocks on bourses.
 
Brokers say international metal prices tanked on Tuesday, which primarily led to a fall in metal stocks. Moreover, in the case of steel, Australian steel major, BlueScope Steel is said to have given a profit warning of a 53 per cent de-growth for 2005. The company cited surplus Chinese output as the primary reason for the downward revision.
 
Global steel sentiment suffered on the back of this. In India, among all metals, steel stocks declined the most. Tata Steel tumbled 3.97 per cent to Rs 392.1, while SAIL came down by 2.17 per cent to Rs 56.4.
 
Otherwise, since January this year, these stocks had moved up after consolidation hopes owing to Mittal Steel's bid to acquire Arcelor.
 
Other steel stocks that came down on Wednesday were Kalyani Steel (down 2.04 per cent), JSW Steel (down 1.31 per cent), Monnet Ispat (down 2.87 per cent), Jindal Stainless (down 1.3 per cent) and Jindal Steel & Power (down 0.11 per cent).
 
Other metal stocks also came down, viz. Hindustan Zinc (down 3.09 per cent to Rs 368.55), Hindalco (down 1.79 per cent to Rs 165) and Madras Aluminium (down 1.04 per cent to Rs 262.85).
 
Most of these stocks have fallen over the one week period too, even as aluminium majors Nalco and Hindalco had gained in past few days on the back of firm local and global prices. Moreover, both companies had raised domestic aluminium prices at the beginning of the month.
 
On Wednesday Nalco went up by 1.96 per cent to Rs 299.05, while Sterlite Industries moved up 1.24 per cent to Rs 1464.6.
 
An analyst with a Mumbai-based brokerage firm says, "There are talks about divestment in Nalco, which has kept the stock buoyant. Moreover, the company has contracted to sell about 30,000 tonne of alumina at about $620 a tonne."
 
Brokers also feel that Nalco looks strong going forward and may firm up, while Hindalco and Tata Steel witness some fall.
 
However, sector analysts have a positive outlook for Indian metal companies, both ferrous and non-ferrous in the medium to long-term.
 
Analysts term the Wednesday's fall as a short-term phenomenon, based on immediate news. Indian metal companies enjoy a positive outlook.

 
 

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First Published: Feb 09 2006 | 12:00 AM IST

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