Shares of metal companies, including JSW Steel, Tata Steel, NMDC, and SAIL, came under significant selling pressure on December 13. These stocks slipped between 3 to 5%, driven by renewed scepticism over China’s economic recovery plans.
At 10:30 AM, shares of SAIL and NMDC were down by 5% and 4.11%, respectively, while JSW Steel, Tata Steel, and Hind Copper saw declines of over 3% each. This makes JSW Steel, Tata Steel, and Hindalco among the top losers on the Nifty 50 index.
The broader market sell-off in metal stocks also dragged the Nifty Metal index down by 2.4%, making it the worst-performing sector so far in today’s trading session.
Investors are closely watching China as it is the world’s largest importer of metals, and plays a crucial role in global metal demand. As a result, any signs of economic stagnation or uncertainty in China have a significant impact on metal prices worldwide. The recent pullback in metal stocks reflects this direct link to China’s economic performance.
China’s leadership recently pledged a series of stimulus measures to boost its economy. However, the lack of concrete details about these plans left investors doubtful, pushing the market into a sell-off.
During a high-level economic meeting on Thursday, China affirmed its commitment to policy shifts aimed at stimulating growth. Yet, the absence of specifics regarding the revival strategy has raised concerns among market participants.
While Chinese officials surprised the markets earlier this week by signalling a shift in their monetary policy stance—the first such move in 14 years—investors remain wary that a large-scale stimulus package is unlikely.
The country has already rolled out a range of measures since late September, but they have failed to significantly revive the economy, which is still grappling with deflationary pressures, weak consumer demand, and a prolonged slump in the housing market.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.
Published on: Dec 13, 2024, 2:24 PM IST
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