Commodity and Energy Stocks Prices Suddenly Become Less

On Tuesday, 15 March 2022, stocks of energy and commodity firms plunged amidst tension related to an economic downfall due to increased COVID-19 cases in Hong Kong and China. Meanwhile, China remains one of the most significant consumers and importers of crude and multiple commodities.

Analysts stay bullish on shares of domestic commodities since certain sanctions on Russia are likely to elevate the prices of thermal coal, steel, nickel, and aluminum. Keep scrolling to know the details!

How Is the Commodity-Based Sector Performing?

The sort after BSE metal index dropped by around 5%, and the BSE Energy declined by 2.5%. Metal shares such as JSW Steel, Jindal Steel, SAIL, and Tata Steel dropped between 4%-5%.

Refer to the table below for a clearer understanding of the same.

Commodity stocks witness a drop primarily due to unpredictability in international markets and cool-off in the prices of commodities, pointing out the recurrence of COVID-19 cases in China. As per analysts, commodity-backed industries such as oil, mining, and metal stay highly volatile.

Get an Insight into the Metal Segment!

Amidst the tumultuous Ukraine-Russia war, crude and metals (non-ferrous and ferrous) have witnessed a reversal. Base metal prices such as aluminum dropped 3%, whereas lead and zinc have rectified 8% each. Over the last week, iron ore prices declined 12%, while international steel prices have been rectified by 4%.

Demand for domestic steel is likely to boost with more disbursement on infrastructure. The firm global prices support the price outlook.

Bottom Line

The resurgence of COVID-19 in Hong Kong and China has led to the slowdown of a wider recovery that shadowed the demand prospect for the metals. However, that’s a temporary limitation, and the story for industrial metals isn’t over. Indian metal firms are structurally well-placed for long-term and mid-term growth.

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Frequently Asked Questions

1. Did the metal stocks affect Nifty?

Nifty closed below 16700 pulled by IT, oil & gas, and metal stocks. The benchmark indices break the 5-day winning pace this week.

2. By how much did the stock price drop for NMDC and Hindalco Industries?

The stock prices of NMDC and Hindalco Industries dropped by 5.57% and 5.26%, respectively.

3. By how much did the stock price drop for Vedanta and Tata Steel?

The stock prices of Vedanta and Tata Steel dropped by 4.82% and 4.88%, respectively.

4. By how much did the stock price drop for JSW Steel, Coal India, and Steel Authority of India?

The stock prices of JSW Steel, Coal India, and Steel Authority of India declined by 3.56%, 4.13%, and 4.43%, respectively.

5. Who were the top Nifty losers?

JSW Steel, Coal India, Tata Steel, ONGC, and Hindalco Industries are among the Nifty losers.

Disclaimer: This blog is exclusively for educational purposes and does not provide any advice/tips on investment or recommend buying and selling any stock.