Equity benchmark indices, Sensex and Nifty, plunged nearly 2% on Monday while metal stocks were the worst hit amid growing concerns over the spread of Chinese coronavirus epidemic. The BSE Metal index slumped over 5% in afternoon trade with all its constituents trading deep in the red.
Shares of metal companies like JSPL, JSW Steel, Tata Steel, Hindalco and others were among the top losers on Monday. Jindal Steel and Power Ltd (JSPL) plunged nearly 9%, JSW Steel was down 7.7%, SAIL fell 6.5%, Vedanta dropped 6.2%, Tata Steel declined 6.1%, Hindalco shed 5.3%, NALCO was down 4.8%, NMDC and Coal India lost 2.7% each and Hindustan Zinc slipped 1.1%.
Meanwhile, the benchmark BSE Sensex lost 750.89 points, or 1.82%, to trade at 40,419.23 at 3:03 PM, while the Nifty 50 was down 241.95 points, or 2%, to 11,838.90.
The Chinese economy has taken a major as the world’s second largest economy has been battling with novel coronavirus for more than a month now. So far, the deadly virus has claimed over 2,600 lives over the globe, with more than 77,000 infected cases being treated presently.
South Korea has been put on high alert as the number of coronavirus infections jumped to over 700 and the death toll rose to 7 on Monday. It is the second worst-hit country with the highest number of coronavirus cases in the world outside China.
International Monetary Fund (IMF) Managing Director Kristalina Georgieva said that the spread of China’s coronavirus outbreak to more than 25 countries could put global economic recovery at risk.
Economists across the world downgraded growth forecasts for China, which is the largest consumer and supplier of several commodities including metals, along with other countries amid pause in economic activity due to shutdowns and travel restrictions.
As far as Indian metal firms are concerned, Kotak Institutional Equities pointed out in a research report that among the base metal companies in India, Nalco’s earnings have the highest sensitivity to metal prices followed by Vedanta, Hindustan Zinc and Hindalco.
“China is not a major trade partner of India with regards to metals but its sheer size and global market share would impact pricing and profitability of various global commodities and indirectly impact Indian metal companies,” it added.
Comments
0 comment