Metal stocks plunge on weak Chinese data

BSE metal index down 0.5%

Metal stocks such as Hindalco, Hindustan Zinc, Jindal Steel, Bhushan Steel, SAIL and Coal India are trading lower by 0.5-1.5% each on the back of disappointing macro-economic data from China.

Chinese manufacturing activity weakened further in June compared to the previous month as output and new export orders declined, according to the initial findings of a survey by HSBC.

The flash Purchasing Managers' Index dropped to a seven-month low of 48.10 in June, compared to the final reading of 48.40 in May. Reading of below 50 indicates a deterioration in business conditions at factories, above 50 shows an improvement. China is the world's largest consumer of copper and aluminum.

India is one of the biggest exporter of metals to China. Weakness in Chinese manufacturing activity will directly impact the revenues of the metal manufacturing companies in India.

Meanwhile, the BSE metal index is also trading weaker by 0.5% or 53 points at 10,383 levels.