Metal, auto stocks melt under pressure
Metal stocks, led by Hindalco and Tata Steel on Friday dropped sharply on the latest data showing a significant contribution by iron and steel prices in the surge in inflation to a 13 year-high of over 11 per cent.
By PTI |
MUMBAI: Metal stocks, led by Hindalco and Tata Steel on Friday dropped sharply on the latest data showing a significant contribution by iron and steel prices in the surge in inflation to a 13 year-high of over 11 per cent.
The 17-share BSE Metal index which comprises stocks of primarily steel and aluminium firms today plunged 603.80 points or 3.99 per cent to close at 14,528.06 points.
Analysts say that despite the government taking necessary steps to bring down steel products and the steel makers agreeing to hold price line till August, the product is increasingly becoming costlier.
Led by Hindalco, whose shares tumbled 6.37 per cent from yesterday's close of Rs 171.95 to close at Rs 161 today. Tata Steel was down 4.66 per cent to Rs 777.60, while Jindal Steel was down 4.52 per cent to Rs 2,012.05 per cent.
Industry data suggests that prices of steel products items like sheets, pig iron and various other construction material became costlier during the reporting week. Even the prices of ceiling fans, a necessity during the summers, climbed by 6 per cent during the week.
The price of steel soared by 14 per cent, while that of pig and foundry iron became costlier by 11 per cent during the week.
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The price of bar and rounds rose by 9 per cent followed by steel sheets (4 per cent) and pipes and tubes (2 per cent). "The market sentiment will definitely get impacted severely looking at this inflation number and this is already reflected in the strong selling wave witnessed in the markets today," Reliance Money CEO Sudip Bandyopadhyay said.
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