The shares of metal companies dropped in trade on October 10, bucking the overall uptrend in the stock markets today. The sharp fall in the share prices pushed the Nifty Metal index down more than 1 percent to emerge as the only sectoral loser on the market today.
The Nifty Metal index was down to 10,237, as seen at 12.22 pm.
Top metal losers today:
Hindustan Copper shares were the top loser on the index, falling nearly 6 percent to trade at Rs 343.60 apiece. Hindustan Zinc shares followed, dropping nearly 4 percent to trade at Rs 493.50 apiece. Steel Authority of India (SAIL) and National Aluminium Company (NALCO) shares fell over 2 percent each, while NMDC, Jindal Steel & Power and Tata Steel shares fell around 2 percent each.
Vedanta, Hindalco Industries and JSW Steel shares fell around 1 percent each, while Welspun Corp shares were trading in the red with marginal losses. Bucking the trend, Adani Enterprises, APL Apollo Tubes and Jindal Stainless Steel shares were trading in the green.
Stronger dollar:
The fall in the metal stocks comes as dollar strengthens and rupee weakens. Rupee stood at 88.70 against the US dollar, as seen at 12.30 pm. It is currently holding above its all-time low of 88.80 which was set last week.
As most global commodities (including metals like copper, aluminum, zinc, gold, silver and others) are priced in dollars, the stronger dollar makes them more expensive for buyers using other currencies.
Falling silver prices:
Silver futures dropped on October 10, losing steam after a record rally. Silver futures with December expiry on Multi Commodity Exchange of India (MCX) rose Rs 276 to Rs 1,46,600 per kilogram, as seen at 12.35 am. The future contracts have now fallen after hitting a lifetime high of Rs 1,53,388 per kg recently.
The future contracts with March and May expiry fell around 0.5 percent each, while those with July expiry were down 1.5 percent. Silver futures with September expiry tumbled nearly 3 percent.
The fall in silver prices pushed down the stock price of Hindustan Zinc, which is the largest producer of silver in India.
Gaza truce deal:
Israel and Hamas have agreed to the first phase of US President Donald Trump's truce plan for Gaza, a ceasefire and hostage deal that could be a first step toward ending a two-year-old war in the Middle East.
A possible truce in the area may turn investors away from safe-have assets like commodities to more risk-based approach. This will likely bear an impact on the metal companies.
Profit booking:
The metal index had gained more than 2 percent on October 9 to close at 10356.2, snapping a three- session losing streak. After such a sharp rise, investors may have resorted to some profit booking.
Also read: Our LIVE blog on stock market updates
Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
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