Nifty Metals’ 5-Session Winning Streak Ends As Index Closes 2 Per Cent Lower - Know Which Stocks Were Worst Hit

Indian stock markets traded under pressure on February 24. The benchmark indices closed in the red as the Sensex fell below the 75,000 mark to close at 74,454.41 down by 856.65 points or 1.14 per cent. The Nifty50 also closed in the red at 22,553.35 levels, down by 242.55 points or 1.06 per cent.

Among the sectoral indices, the Nifty Metals index was the worst hit as it closed 2.17 per cent lower at 8,422.8 levels on February 24. The index fell 2.68 per cent to hit an intraday low at 8378.2 levels.

The index has consistently closed in the green for the last five sessions since February 17. Notably, the index gained as much as 4.35 per cent in these five sessions.

Which Stocks Were Worst Hit

All fifteen constituents of the index closed in the red, declining as much as 5.93 per cent on February 24. National Aluminium Company Ltd (NALCO), Steel Authority of India Ltd (SAIL) and Vedanta Ltd emerged as top losers among the constituents of the index.

National Aluminium Company Ltd shares declined 6.05 per cent to hit an intraday low of Rs 188.84 on the NSE. The stock later closed at Rs 189.1 apiece, down by 5.93 per cent.

Shares of SAIL fell 4.53 per cent to hit an intraday low at Rs 107.65 apiece on the NSE. The stock closed at Rs 108 apiece, down by 4.22 per cent. Vedanta Ltd’s stock also fell 4.37 to trade at an intraday low of Rs 419.05 apiece on the NSE, the stock closed at Rs 421.85 down by 3.73 per cent.

Other major metal stocks such as Ratnamani Metals & Tubes Ltd, Hindustan Zinc Ltd, Tata Steel and Jindal Steel also declined between 2.11 per cent and 2.83 per cent.

Shares of Adani Enterprises, APL Apollo Tubes Ltd, JSW Steel, Hindalco, Hindustan Copper Ltd and Welsun Corp fell up to 1.98 per cent.

Why Did The Index Snap Its Gaining Streak

The correction seen in the Nifty Metal index today follows the surge witnessed by metal stocks last week. Speculations around the government announcing safeguard duties to protect the domestic metals industry contributed to the index’s five-session gaining streak. Notably on February 21, Nifty Metal was the only sectoral index to close in positive territory, bucking the trend.

The index entered the red territory in today’s trade due to multiple factors. The probable imposition of US tariffs and their impact on global trade, a shorter trading week on account of Maha Shivratri and the discovery of a new virus in China seem to have affected investor sentiments in the metals space. Rupak De, Senior Technical Analyst at LKP Securities told Outlook Money that the discovery of the new virus in China has damaged investor sentiment as China is a top user of industrial metals.

“On the macro front, a newly found virus in China seems to have damaged sentiment in the metal space, as China is a top user of industrial metals. Besides, the renewed tariff war has also added to the woes,” De said.

De projected that the domestic metal sector looks weak and can decline further to 8000 levels. Notably the index closed at 8,422.8 level on February 21. The senior analyst added that a ‘decisive move’ above 8,800 could also cause a ‘smart rally’ in the index.

“The Nifty Metal index has been consolidating within a broader range of 8000 and 8800, finding resistance around 8800 in recent trades. Technically, the sector is looking weak and has the potential to reach 8000 in the short term. On the other hand, only a decisive move above 8800 might induce a smart rally in the index," De said.