The BSE Metal index fell over 1 percent in today's trade after data from US and China showed weakness in the global economy. That has led to a meltdown in commodities, particularly metals. Both nickel and aluminium prices in international markets hit a seven-month low, copper hit a four-month low, while zinc traders have not seen such prices ($2,600 a tonne) in over two years.

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This has led to a sharp fall in the shares of some of India's top metal companies. Aluminium maker Hindalco and Vedanta (which has interests in a whole host of metals from iron ore to copper to zinc and aluminium) were among the top losers in trade on Friday (May 12).

And, the sell-off could get worse. "The copper market has broken down through the key support level of $8,450, which it was testing for a couple of days. It is triggered by weak inflation data out of China, where construction and infrastructure sectors are not doing particularly well," said Dan Smith, head of research at Amalgamated Metal Trading was quoted as saying by Reuters.

According to the data from the National Bureau of Statistics , consumer inflation weakened to a two-year low of 0.1 percent in April, as food and energy costs eased. The figures were partly affected by the base of comparison from last year.

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Inflation slowed in the US too but data also showed that unemployment in the world's largest economy was the worst since October 2021.

Slowing inflation, which shows that prices aren't rising as fast they used to, is not always good news. If it's triggered by a slowdown in the economy, it's bad news and that's what the market fears is the case the world's two largest economies.

China’s consumer prices barely grew last month, while borrowing slumped, providing further evidence the economy’s recovery is waning and fueling expectations of more central bank stimulus.

The onshore Chinese yuan weakened by 0.04 percent to 6.9428 against the US dollar shortly after the data was released.