Metal shares under pressure; Nifty Metal index down over 2%

Shares of metal companies were under pressure with Nifty Metal index falling more than 2% after the proposal to impose duties on steel and aluminium by the Trump administration.

JSW Steel, Jindal Steel and Power, Steel Authority of India (SAIL), Jindal Stainless (Hisar), NMDC and Hindalco Industries from the Nifty Metal index were down over 3% on the National Stock Exchange (NSE). Tata Steel and National Aluminium from the index were down in the range of 2% to 3%.

At 09:59 am; Nifty Metal index, the largest loser among sectoral indices, was down 2.4% at 3,866, as compared to 0.80% decline in the Nifty 50 index. The metal index hit a low of 3,850, in intra-day trade.

According to reports, US President Donald Trump said on Thursday that he would impose tariffs on imports of steel and aluminium products, in a move he said would protect US industry, but which experts said could hurt US producers and face legal challenges from trade partners.

“If Trump’s proposal were to become a reality, there will be pressure on margins for the metal players, especially steel, globally. Manufacturers will resort to undercutting prices. Indian producers have been enjoying superior margins till recently. JSW Steel, which has one of the highest margins has seen a big sell-off on Monday. Manufacturers who do not have captive power plants will take a bigger hit. As a result, global growth will be dented,” says A K Prabhakar, head of research at IDBI Capital.