Shares of metal companies are under pressure second day in a row after LMEX, a gauge of six metals traded on the London Metal Exchange (LME), hit seven-month low on Monday, February 10, 2014.
LMEX lost nearly 4% in past two trading sessions to 2,995 from Rs 3,118 on March 6. The index close at its lowest level since August 2013 on LME as China's exports unexpectedly tumbled in February, raising fears of a slowdown in the world's second-largest economy.
Hindalco Industries, Tata Steel, Steel Authority of India (SAIL), Sesa Sterlite, Jindal Steel and Power, NMDC, Hindustan Zinc and JSW Steel are down 2-4% on the Bombay Stock Exchange (BSE).
At 1220 hours, the S&P BSE Metal index, the largest loser among sectoral indices, is down nearly 3% or 254 points at 8,998 as compared to 0.35% or 76 points fall in S&P BSE Sensex.
The BSE metals index is down 3.74% in past two trading sessions, while the benchmark index is down marginally 0.28%.
Metal prices depend substantially on China’s economic activity as it accounts for 40%-50% of global aluminium, copper and zinc consumption. However, the latest leading economic indicators are not encouraging with a weak output and low order growth rates, says analyst at India Ratings & Research.
Fitch Ratings has reduced China’s 2014 real GDP growth projection to 7% from its earlier projection of 7.5% estimated last year. A further economic slowdown in China will cause a sustained long-term correction in metal prices, says analyst.
Among the individual stocks, Tata Steel and Hindalco Industries have dipped 4% each at Rs 349 and Rs 117 respectively, while SAIL and Sesa Sterlite are down 3% each at Rs 58 and Rs 180 respectively.
LMEX lost nearly 4% in past two trading sessions to 2,995 from Rs 3,118 on March 6. The index close at its lowest level since August 2013 on LME as China's exports unexpectedly tumbled in February, raising fears of a slowdown in the world's second-largest economy.
Hindalco Industries, Tata Steel, Steel Authority of India (SAIL), Sesa Sterlite, Jindal Steel and Power, NMDC, Hindustan Zinc and JSW Steel are down 2-4% on the Bombay Stock Exchange (BSE).
At 1220 hours, the S&P BSE Metal index, the largest loser among sectoral indices, is down nearly 3% or 254 points at 8,998 as compared to 0.35% or 76 points fall in S&P BSE Sensex.
The BSE metals index is down 3.74% in past two trading sessions, while the benchmark index is down marginally 0.28%.
Metal prices depend substantially on China’s economic activity as it accounts for 40%-50% of global aluminium, copper and zinc consumption. However, the latest leading economic indicators are not encouraging with a weak output and low order growth rates, says analyst at India Ratings & Research.
Fitch Ratings has reduced China’s 2014 real GDP growth projection to 7% from its earlier projection of 7.5% estimated last year. A further economic slowdown in China will cause a sustained long-term correction in metal prices, says analyst.
Among the individual stocks, Tata Steel and Hindalco Industries have dipped 4% each at Rs 349 and Rs 117 respectively, while SAIL and Sesa Sterlite are down 3% each at Rs 58 and Rs 180 respectively.
