Why Nifty Metal Index Fell 6.43% Today

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Why Nifty Metal Index Fell 6.43% Today
Credit: © Reuters.

By Aditya Raghunath

Investing.com -- The Nifty Metal Index closed down 6.43% today. Why did this happen? It was a series of news items that caused it to fall. First up was the news that the US Fed Reserve would start tapering their bond purchases reducing liquidity in the system.

This caused investors to move to safer investments. Commodities across the world fell but metal fell harder because it had run up so much. The US dollar is moving up and that will put pressure on other asset classes including commodities. Even oil has fallen to below $64 levels.

The second reason is because of China’s production cuts. Two days back, mining giant BHP had put out a note on the economy and commodity where it warned, "the increasing likelihood of stern cuts to steel output in China in the current half year … is testing the bullish resolve of the futures markets".

"Prices have decreased materially in late July and early August, but they remain extremely high relative to history at around US$160/t at the time of writing," BHP said.

NMDC Ltd (NS: NMDC ) fell 9.94%, Vedanta Ltd (NS: VDAN ) lost 9.89%, Tata Steel Ltd (NS: TISC ) lost 8.85%, Steel Authority of India Ltd. (NS: SAIL ) closed 8.68% lower and Jindal Steel & Power Ltd (NS: JNSP ) lost 8.06%. JSW Steel Ltd (NS: JSTL ) lost almost 8% while Hindalco Industries Ltd. (NS: HALC ) closed almost 6% lower today.

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  • Manish K Das @Manish K Das
    not done yet.. keep eye on the seller
    Like 0
  • Rajesh Jethwani @Rajesh Jethwani
    Buy buy buy on dips
    Like 4
  • prasanth kumar @prasanth kumar
    hi
    Like 0
  • IS Khandelwal @IS Khandelwal
    Its over reaction. Next week it will recover to some extent.
    Like 2

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