After dull 2018, no silver lining in market cap for metals sector

Hindalco, JSW Steel, Tata Steel, which are structurally sound and have low capital and costs, will do better in 2019, say analysts

Most metal and mining stocks saw significant erosion in their market capitalisation in 2018, with the representative index — the S&P BSE Metal — losing almost a fifth of its previous levels. Global trade uncertainty, volatility in the sector and a fall in base metal prices had hurt sentiments. So has increase in raw material prices, especially in the energy sector.

Fears of slowing demand from China led to lower prices in the October-December quarter (Q3). This will have a negative impact on the profitability of most players. With earnings growth moderating due to falling prices, it is not surprising