Metal stocks suffered sharp a sell-off on Monday amid broad-based weakness in the market. The sectoral gauge Nifty Metal tumbled almost 300 points or 5.23 percent to settle at 5,420.45. Overall, more than over 153.8 million shares of Nifty Metal constituents, valued at more than Rs 42.67 billion, changed hands, NSE data showed.

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All 15 members of Nifty Metal index ended in the red with Hindustan Copper, JSW Steel, Adani Enterprises, Jindal Steel, Nalco, Tata Steel, Hindalco and Sail closing 5-9 percent lower each.

Tata Steel shares ended the session at Rs 1,100.5 apiece on NSE. The steelmaker's stock took its losses to 9.5 percent in five consecutive trading sessions. In the past one year, Tata Steel shares have rewarded investors with a return of 68 percent.

State-run Steel Authority of India’s (SAIL) stock, fell more than 5 percent on Monday, having risen 66 percent in the last one year. The stock has lost almost 10 percent of its value in five days.

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Hindalco Industries shares plunged more than 5 percent to end the session at Rs 477.5. The stock has gained more than 98 percent in a year.

The stocks of National Aluminum Company, Jindal Steel, and Adani Enterprises fell almost 7 percent each at the close. Meanwhile, Hindustan Copper -- the top laggard in the Nifty Metal pack -- ended the day 8.5 lower at Rs 120.

Shares in state-owned Coal India ended the day 1.3 percent lower at Rs 156.7. During the day, having slid to as low as Rs 154.8 during the session.

The sharp correction in metal stocks was in line with a heavy sell-off in the market. The Sensex ended 1,546 points lower and the Nifty cracked below 17,150 for the day amid losses across sectors, with the IT, auto, pharma and consumer shares being the worst hit.

Though the Nifty Metal has gained more than 67 percent in the past one year, as against the benchmark Nifty50's 20 percent rise, the sectoral gauge has dropped almost 8 percent in five days.

Earlier this month, brokerages had turned bearish on metal company shares. Jefferies is of the view that weakening steel prices and a sharp rally in coking coal are impacting the steel margin outlook after a big expansion in 2021. Indian steel company margins have peaked and will fall sharply by FY23, the brokerage said.

Jefferies downgraded Tata Steel from ‘buy’ to ‘hold’, and JSW Steel from 'buy' to ‘underperform’’. The brokerage, which prefers aluminium stocks to steel scrips, retained its ‘buy’ rating on shares of aluminium and copper maker Hindalco.

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(Edited by : Ajay Vaishnav)

First Published:Jan 24, 2022 5:47 PM IST