BSE Metal Index top loser, Coal India weighs

Coal India witnessed selling pressure on Monday and was down over 5% as liquidity in the stock would increase post the government's decision to divest its 10% stake in the company

The BSE Metal Index was the top loser among sectoral indices down over 2%. Metal shares were trading lower on Monday, amid weak metal futures on the London Metal Exchange, weighed down by selling pressure in Coal India.

Coal India witnessed selling pressure on Monday and was down over 5% on reports that the government is planning to sell up to 10% of its holding in the world’s largest coal producer through the offer-for-sale (OFS) route.

"Coal India has dropped on account of higher liquidity post the offer-for-sale by the government. Further, buying interest has waned as investors would wish to defer purchase of the stock for now," said Ambareesh Baliga, independent market analyst.

Long term investors can accumulate the stock at Rs 285-290 levels, Baliga said.

Among other shares in the metal index, NMDC was the second biggest loser down 4.5%.

Metal futures were trading lower on the London Metal Exchange on Monday with Copper and Zinc 3-month futures down 0.5-1% each.

Copper majors, Sterlite Industries was down 2.1% and Hindalco lost 0.3%. Hindustan Zinc was down 1%.

Steel shares were also among the top losers in the index with Jindal Steel, Tata Steel and JSW Steel down 1-1.5% each.

"Tata Steel is our preferred pick in the steel space since valuations are attractive at current levels even as concerns from European operations remain," said Bhavesh Chouhan who tracks metals and mining sector at Angel Broking.