Indian metal stocks witnessed a sharp decline today, falling by up to 19per cent as global trade uncertainties and growth-related concerns weighed heavily on investor sentiment. The drop came amid heightened fears over the impact of reciprocal tariffs imposed by the U.S. on steel and aluminium imports, which have cast doubts over export prospects and overall demand recovery.
The shares of NMDC and Tata Steel experienced sharp fall, diving by 18.2per cent and 11.56per cent respectively. This was followed by stocks like Jindal Stainless, National Aluminium Company (NALCO), Hindustan Zinc and Vedanta crashed nearly 10per cent each.
Meanwhile, the shares of Hindalco fell by 9per cent to their day’s low of Rs 546.25 on the BSE.
The unchanged 25% U.S. tariff on steel and aluminium is expected to inflate domestic prices in the U.S., affecting global competitiveness. With exporters from countries like Vietnam, South Korea, and Japan increasingly catering to markets like India and the Middle East, Indian producers now face a surge in cheap imports. This is putting immense pressure on domestic players, already grappling with thinning margins and volatile production volumes.
An earlier note by Jefferies stated that the U.S. market—though accounting for only 4per cent of India’s steel exports—still plays a critical role in sentiment, particularly for companies like Hindalco whose subsidiary Novelis generates 13–15per cent of consolidated EBITDA from U.S.-linked businesses.
Q4 preview
Domestic brokerage firm Nuvama expects Nifty 50 earnings to grow just 2per cent YoY in Q4FY25, with full-year FY25 EPS growth forecast at 6per cent, sharply lower than the 8per cent projected earlier. The revision is attributed to persistent earnings weakness, weak top-line growth, and rising global uncertainties, especially those linked to the impact of U.S. tariffs.
With this, Nuvama stated the sectors on which it is underweight. The sectors included in the list are Industrials, metals, IT, power, PSU banks.
