Metals Stocks Sink! Vedanta, Hindalco, Tata Steel Fall Up To 3.5 Per Cent – Here’s Why

Metal stocks continued to slide on Wednesday, April 9 after US President Donald Trump struck China with an additional 50 per cent tariff on Chinese goods, taking the total tariffs on the country to 104 per cent. This sharp hike in tariffs came as China retaliated after Trump's April 2 tariff imposition. Nifty Metal, the index which tracks the performance of 15 major metal stocks, melted 1.48 per cent.

The top losers from the index were Lloyds Metals And Energy (-3.46 per cent), and Hindustan Zinc (-2.6 per cent). Tata Steel, Welspun Corp, and National Aluminum also slipped between 2 per cent and 2.5 per cent.

Other metal stocks such as Vedanta, Hindalco, NMDC, and JSW Steel also ended the day in the red. Of the 15 constituents within the index, 12 ended the day in red.

What Melted Metal Stocks Today

Post Trump's tariff imposition on April 2 on its major trading partners, including India and China, the metal index has seen a sharp decline of over 13.5 per cent in the previous five sessions.

The tariffs do not have a direct impact on India’s metal industry, however, an escalating trade war between the two superpowers, which together account for 45 per cent of global GDP, can majorly impact the world’s economic growth. This could further lead to increased metal prices.

Moreover, India also risks becoming a dumping ground for goods from countries facing export restrictions or tariffs from the US.

What Is The US Aiming For With Reciprocal Tariffs?

Kotak Institutional Equities, in a recent report, said that the US aims to reduce its trade deficits and boost manufacturing through reciprocal tariffs. These tariffs are designed to increase US exports or reduce imports from other countries. The reciprocal tariff system is based on trade flows, not the current tariff structure.

While lower tariffs on US imports from other countries might help in the long term, they may not fix the US’ trade deficits right away, the report added.