Shares of metal companies rattled under pressure on February 3, weighed down by a spike in the dollar index after Trump's sparked fears of an escalating trade war amid major economies. Alongside, prices of base metals also slipped on the London Metal Exchange, further exacerbating pain for metal counters.
Shares of Vedanta, NALCO, NMDC were the worst hit within the metal pack, falling around 6 percent each, followed by Tata Steel, Jindal Stainless, Hind Copper, Hindalco and SAIL, which were down 3-5 percent. Sharp cuts across these metal counters weighed heavily on the Nifty Metal index, pulling it down over 3 percent.
| Company | CMP | Chg(%) | Volume |
|---|---|---|---|
| Vedanta | 412.85 | -6.15 | 7.56m |
| NALCO | 186.00 | -6.01 | 4.07m |
| NMDC | 60.81 | -5.55 | 8.21m |
| SAIL | 100.87 | -5.31 | 6.87m |
| Hindalco | 560.45 | -4.43 | 1.31m |
| Hind Copper | 230.14 | -4.26 | 1.18m |
| Jindal Stainles | 599.75 | -3.91 | 356.92k |
| APL Apollo | 1,449.00 | -3.8 | 74.17k |
| Tata Steel | 127.99 | -3.75 | 8.08m |
| Hind Zinc | 433.95 | -2.7 | 203.19k |
| Adani Enterpris | 2,215.60 | -2.4 | 220.94k |
| Welspun Corp | 717.90 | -2.35 | 54.15k |
| JSW Steel | 915.20 | -2.04 | 245.48k |
| Jindal Steel | 765.00 | -1.46 | 1.50m |
| Ratnamani Metal | 2,827.80 | -0.44 | 1.57k |
The Dollar Index surged over 1 percent, reaching levels around 110, simultaneously putting pressure on the Indian rupee, which opened at a record low today in response.
A rise in the dollar index generally spells trouble for metal companies in non-dollar denominated countries, including India. This uptick in the greenback can erode the export competitiveness of Indian metal manufacturers, drive up input costs, and intensify financial burden, particularly for those carrying dollar-denominated debt.
Moreover, the imposition of the first set of tariffs by President Trump on three major trade partners—China, Canada, and Mexico—has fueled concerns of a full-blown trade war between key global economies. Trump signed off on 25 percent tariffs on imports from Canada and Mexico, while Chinese imports were subjected to a 10 percent levy.
Given that China is the world's largest importer of metals, any trade tensions involving the country could significantly affect global demand for metals, further complicating the outlook for Indian metal companies.
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