Ten metal and mining stocks dropped by 2.17% to 5.3% at 10:36 IST on BSE amid fears of slower growth in China, the world's second-largest economy.
Vedanta (down 5.18%), Jindal Steel & Power (down 5.3%), Tata Steel (down 3.45%), NMDC (down 2.37%), National Aluminium Company (down 4.15%), Hindustan Zinc (down 3.42%), Hindalco Industries (down 3.54%), JSW Steel (down 2.17%), Hindustan Copper (down 2.44%), and Steel Authority of India (down 4%) declined.
The S&P BSE Metal index was down 2.57% at 7,212.64. It underperformed the BSE Sensex, which was down 1.62% at 24,995.15
The S&P BSE Metal index had outperformed the market over the past one month till 6 January 2016, rising 1.69% compared with 0.90% decline in the Sensex. The index had also outperformed the market in past one quarter, rising 3.61% as against Sensex's 5.67% fall.
Fears of slower growth in China weighed on metal and mining stocks. Economic data this week showed that China's services sector grew at the weakest pace in 17 months in December. Another data showed that activity had slowed in the country's key factory sector. Another concern is of China's weakening currency. China's central bank again surprised markets today, 7 January 2016 by setting onshore yuan's value lower to the US dollar, sending the domestic stock markets tumbling. The People's Bank of China continued to fix the onshore yuan's value lower to the US dollar, at 6.5646, down 0.51% from the previous day's closing level, the biggest move since 13 August 2015, after the yuan's devaluation.
China is the world's largest consumer of steel, copper and aluminum.
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Meanwhile, the High Grade Copper for March 2016 delivery was currently down 0.98% at $2.0675 per pound on the COMEX.
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