Shares of Vedanta, Tata Steel, NMDC, SAIL, Hindalco, Jindal Steel and JSW Steel fell up to 7% in early deals on Monday after US President Donald Trump imposed tariffs on China, Canada and Mexico, triggering a trade war, which could hamper global economic growth. Trump announced a 10% levy on imports from China. That will take effect from Tuesday. A rising US dollar also weighed on Indian metal stocks as buying raw materials and finished products from China would become more expensive for buyers. The dollar index rose over 1% to 110 , putting pressure on Indian rupee, which hit a record low of 87 in early deals today.
India imports finished steel, stainless steel, hot-rolled coils, galvanized sheets, and plates from China due to cheaper prices of Chinese products compared to the domestic production.
The BSE metal index was among the top sectoral losers with all its components trading in the red. It slipped 800 pts to 27,352.
Shares of Vedanta declined 7% to Rs 410 against the previous close of Rs 439.75. Market cap of the firm slipped to Rs 1.65 lakh crore. Tata Steel stock fell 3% to Rs 127.80 against the previous close of Rs 132.90. Market cap of the firm slipped to Rs 1.61 lakh crore. Similarly, Jindal Steel and Power stock lost 3.21% to Rs 751.45 against the previous close of Rs 776.60. Market cap of the firm slipped to Rs 79,025 crore.
Shares of JSW Steel fell 3% to Rs 909.45 against the previous close of Rs 934.75 on BSE. Steel Authority of India also fell over 4% to Rs 100.35 on BSE in early deals today. Hindalco stock slipped 4.87% to Rs 558 against the previous close of Rs 586.80 on BSE.
Another metal stock NMDC fell over 4% to Rs 60.69 with a market cap of Rs 54,456 crore.
In the recently announced Union Budget, the Indian industry called for imposition of safeguard duty on steel imports, focus on government capex and infrastructure. This would have led to the promotion of domestic steel sector-higher demand and protect domestic prices compared to steel import prices.
Axis Securities also called for imposition of safeguard duty on imports to mitigate the impact of low-cost foreign steel. Any new announcement towards this will be keenly watched, said the brokerage.