Mumbai, Feb 04 : Indian metal stocks suffered a sharp decline on Monday as global trade tensions and a strengthening US dollar weighed heavily on the sector. The BSE Metal Index fell 800 points to 27,352, making it one of the top sectoral losers, with all its components trading in the red.
The slump followed US President Donald Trump’s decision to impose a 10% tariff on imports from China, Canada, and Mexico, a move that has raised concerns about a potential trade war and its impact on global economic growth. The tariffs, which are set to take effect on Tuesday, further exacerbated worries among investors.
Adding to the sector’s woes, the dollar index surged over 1% to 110, making imports of raw materials and finished products from China more expensive. The Indian rupee hit a record low of 87 against the dollar in early trading, increasing cost pressures on the domestic metal industry.
Several major players in the Indian metal sector saw significant declines. Vedanta’s shares dropped 7% to ₹410, reducing its market capitalization to ₹1.65 lakh crore. Tata Steel fell 3% to ₹127.80, with its market value slipping to ₹1.61 lakh crore. Jindal Steel and Power lost 3.21% to close at ₹751.45, while JSW Steel declined 3% to ₹909.45. SAIL shares fell more than 4% to ₹100.35, Hindalco slid 4.87% to ₹558, and NMDC shares dropped over 4% to ₹60.69, bringing its market capitalization to ₹54,456 crore.
India’s dependence on imports of finished steel, stainless steel, hot-rolled coils, galvanized sheets, and plates from China, due to their lower prices compared to domestic production, has left the sector vulnerable to rising costs. The combination of US tariffs and a strengthening dollar is expected to further strain Indian buyers and the broader industry.
The domestic steel industry had called for measures in the Union Budget to support the sector, including the imposition of safeguard duties on steel imports and increased government spending on infrastructure to boost demand. These measures, industry leaders argued, would help stabilize domestic prices and promote local production.
Brokerage firm Axis Securities underscored the need for safeguard duties to mitigate the impact of low-cost foreign steel on the Indian market and highlighted the importance of potential policy announcements in this regard. With escalating trade tensions and currency challenges, the metal sector remains under pressure, awaiting policy interventions to navigate the current uncertainties.
