Metal stocks down, index nears four-year low

SAIL, Jindal Steel and Power, Sterlite Industries, Hindalco and Sesa Goa are down 3% each on BSE.

Shares of metal companies are under pressure on the bourses with the Bombay Stock Exchange (BSE) metal index trading near to its four-year low after mixed data on the US economy and worries about scant demand from top consumer China as well as high inventories levels. China is the world's largest copper consumer, accounting for about 40% of global demand.

The BSE Metal index, the largest loser among sectoral indices, has underperformed the market by falling almost 2% at 8,934 compared to 0.51% fall in benchmark Sensex at 1206 hours. The metal index hit low of 8,918, its lowest level since May 2009.

So far in current calendar year 2013, the metal index has down by almost 18% against less than 3% drop in Sensex.

LMEX, a gauge of six metals traded on the London Metal Exchange (LME), fell 1.35% to 3,340.60 on Friday, March 1, 2013.

“Post Lunar New year holidays in China, physical activity in China has not been encouraging. There have been doubts regarding any uptick in domestic demand in the short run,” according to analyst at IIFL.

LME Copper prices remain under pressure, weighed by persistent rise in LME warehouse stocks. LME inventories are already up by literally 40% during this year and cancelled warrants have also fallen substantially, he added.

Among the individual stocks, SAIL, Jindal Steel and Power, Sterlite Industries, Hindalco and Sesa Goa are trading lower by 3% each, while NMDC, Coal India, Hindustan Zinc, JSW Steel and Tata Steel are down 1-2% on BSE.