Metal stocks slide; Jindal Steel cracks over 17% amid export duties

Metal stocks faced heavy drubbing on Monday, with Jindal Steel & Power cracking over 17 per cent, after the government imposed export duties on steel-making raw materials.

Shares of Jindal Steel tumbled 17.40 per cent, JSW Steel tanked 13.20 per cent and Tata Steel plunged 12.53 per cent on the BSE.

Also, NMDC declined 12.44 per cent, SAIL (10.96 per cent), Hindalco Industries (3.65 per cent), APL Apollo Tubes (3.42 per cent) and Vedanta (2.77 per cent).

The metal index also tanked 8.33 per cent to end at 17,655.22.

Tata Steel was the biggest drag in the Sensex pack.

"Volatility was hallmark of today's trade. Volatility struck benchmark Nifty as it was aiming to build on to morning gains. Blame it to Nifty metal index which dropped over 8 per cent after government hiked duty on steel products," said Prashanth Tapse, Vice President (Research), Mehta Equities Ltd.

The government has waived customs duty on the import of some raw materials, including coking coal and ferronickel, used by the steel industry, a move which will lower the cost for the domestic industry and reduce the prices.

Also, to increase domestic availability, the duty on exports of iron ore has been hiked up to 50 per cent, and a few steel intermediaries to 15 per cent, according to a notification.

The tax on the export of iron ores and concentrates has been hiked to 50 per cent, from 30 per cent, while that on iron pellets a 45 per cent duty has been imposed.

"Markets gave up all its gains in afternoon trade today as it simply could not recover after the export tax imposed on steel products," said S Ranganathan, Head of Research at LKP securities.

The 30-share BSE benchmark Sensex encountered volatility during the day and settled 37.78 points or 0.07 per cent lower at 54,288.61.