Metal stocks slip on buzz of hike in royalty rates on minerals

Nine metals stocks lost 0.82% to 5% at 13:10 IST on BSE on reports the government has decided to increase royalty rates on minerals.

Bhushan Steel was locked at 5% lower circuit, Steel Authority of India (down 2.71%), Tata Steel (down 1.85%), JSW Steel (down 1.64%), Sesa Sterlite (down 1.54%), Hindalco Industries (down 1.53%), Jindal Steel & Power (down 1.19%), Hindustan Zinc (down 1.18%), and NMDC (down 0.82%) edged lower.

The S&P BSE Metal index was down 1.3% at 12,837.63. It underperformed the Sensex, which was down 0.01% at 26,312.48.

The S&P BSE Metal index had underperformed the market over the past one month till 20 August 2014, sliding 1.95% compared with 2.62% rise in the Sensex. The index had, however, outperformed the market in past one quarter, rising 8.12% as against Sensex's 7.95% rise.

The Union cabinet reportedly hiked royalty rates on iron ore to 15% from 10% earlier. Manganese royalty rates are increased to 5% from 4.2% earlier.

Meanwhile, the HSBC/Markit Flash China Manufacturing Purchasing Managers' Index (PMI) fell to 50.3 in August from July's 18-month high of 51.7, missing forecasts.

China is the world's largest consumer of steel, copper, and aluminium.

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