Major metal stocks were bleeding during the trading session on Tuesday as the stimulus announced in China failed to boost the morale of Indian metal counters. Metal and mining stocks tumbled as much as 8 per cent during the opening tick on Tuesday, before making a partial recovery.
Nifty Metal Index dropped more than 3.15 per cent at the opening tick with as many as 14 out of 15 constituents of the index trading in red. A slew of underwhelming stimulus announcements made by the Chinese economic authority dented the prospects for the Indian metal stocks.
Iron miner NMDC led the losers as the stock crashed 7.75 per cent to Rs 211.05, against its close at Rs 228.80 in the previous trading session. The total market capitalization of the company slipped below Rs 65,000 crore mark. Its demerged entity NMDC Steel also dropped more than 2 per cent.
National Aluminum (Nalco) cracked 6.20 per cent to 201.50 on Tuesday, with its total valuations falling below Rs 40,000 crore mark. Another aluminium player Hindalco Industries dropped 3.05 per cent to Rs 708.80 during the session, with its marketcap slipping below Rs 1.6 lakh crore.
Tata Steel crashed 4.65 per cent to Rs 156.70, against its close at Rs 164.30 on Monday. The total market capitalization of the Tata Group firm dropped more than 2 lakh crore. Jindal Steel & Power dropped more than 5 per cent to Rs 950, with total valuations barely holding Rs 1 lakh crore mark.
Another metal bluechip JSW Steel declined 3.5 per cent to Rs 983.30, whereas Vedanta cracked 3.15 per cent to Rs 484.40 on during the session. Steel Authority of India (SAIL) fell 3.3 per cent to Rs 127.84, while Jindal Stainless dropped 3.24 per cent to Rs 734.35 at the opening tick.
In its recent report on emerging markets, global brokerage firm Morgan Stanley has picked India as its largest overweight bet. "Geopolitical risks, the US election and 2025 policy uncertainty are the prime concerns for us through October and November," said the overseas brokerage.
In Q2FY25, all the companies under our coverage may witness sequential margin contraction as we model flat sales volumes QoQ, while metal prices witnessed correction. On a YoY basis as well, all companies except Aluminium names could report margin contraction, said Axis Securities in its preview report.
The possible cut of steel production by China in winter, expiry of Bureau of Indian Standards (BIS) certification for some steel mills exporting to India and planned maintenance shutdown by major mills of South Korea, also should support HRC prices in the near term, said Elara Capital.
"The onset of busy construction season in the domestic market is set to bolster demand, supporting steel prices. Further, lower coking coal and iron ore prices are likely to ease pressure on profit margin, providing relief for steelmakers. Our top pick is Jindal Steel and Power," it added.