Trade Disputes and Growth Fears Cause Tata Steel and Other Metal Stocks to Plummet by 19%
As market mood was negatively impacted by uncertainty around global trade and growth, Indian metal equities saw a steep decrease today, plunging as much as 19%. The decline coincided with increased concerns about how the United States’ retaliatory tariffs on steel and aluminum imports would generally affect export opportunities and demand recovery.
NMDC and Tata Steel’s stock fell precipitously, plunging 18.2% and 11.56%, respectively. Stocks such as Jindal Stainless, National Aluminium Company (NALCO), Hindustan Zinc, and Vedanta thereafter had a roughly 10% decline apiece. On the BSE, Hindalco’s shares dropped 9% to their lowest level of the day, Rs 546.25.
It is anticipated that the 25% U.S. tax on steel and aluminum, which has not been altered, will raise domestic costs in the country and reduce its ability to compete internationally. Indian producers now have to contend with a rise in low-cost imports as exporters from nations like South Korea, Japan, and Vietnam increasingly serve markets in the Middle East and India. Domestic players are already struggling with narrowing margins and erratic production levels and are under tremendous pressure.
Even though the U.S. market only makes up 4% of India’s steel exports, it nevertheless significantly impacts attitude, according to a previous Jefferies research. This is especially true for companies like Hindalco, whose subsidiary Novelis accounts for 13–15% of consolidated EBITDA from U.S.-linked operations.
Q4 Preview:
According to domestic trading firm Nuvama, Nifty 50 earnings would only climb 2% yearly in Q4FY25. The full-year FY25 EPS growth prediction is 6%, much less than the 8% previously predicted. Persistent earnings difficulties, sluggish top-line growth, and growing global uncertainties—particularly those related to the effect of U.S. tariffs—are the reasons for the change.
Nuvama then listed the industries in which it is underweight. The list includes the following sectors: PSU banks, IT, power, metals, and industries.
