Vedanta, Sail to Hindalco: Why are metal stocks under pressure? Explained

Metal Stocks underperformed on Thursday, June 19, as the nifty metal index declined 0.5 percent in an otherWise flat market, marking its third session of losses. Over this streak, the index has dropped near 2.7PERCENT, Losing Momentum That Followed A Robust 7 Percent rally in May. Analysts Attribute This Pullback to Profit-Taking, A Firm Us Dollar, and Renewed International Tensions, Especially over Over Middle East Uncertaines and Stalled Us-CHINA TRADE Negotiations.

Profit-Taking after a surge

After an impressive recovery last month, metal stocks Saw Investors Locking in Profits. The absence of a clear resolution in us-china trade negotiation

Concerns Over Escalating Conflict in the Middle East also added to Market Apprehension. As the situation entered its seventh day, US President Donald Trump Hinted at Potential American Involvement in Military Operations Targeting Iranian Nuclear Facility. This Hawkish tone unsettled markets, lifting oil prisles and exacerbating macroeconomic uncerti. The uncertainty weighed particular heavily on metal stocks, which are sensitive to rain energy costs and geopolitical risk.

Moreover, Earlier this week, the us federal reserve opted to mainTain benchmark interested rates in the 4.25–4.50 per cent Range, Rejecting Pressure from President Trump for Rate Cuts. The decision, AlongSide Dovish Forward Guidance on Future Monetary Policy, Bolstered The Us Dollar. Against a Stronger Dollar, Commodities Priceed In Greenbacks – Metals Included – BECAME Relatively Costlier, Weighing on Metal Companies ‘Margins’.

“Metal Stocks are under pressure for two reasons: Steady Interest Rates after the Us Fed Meeting and Rising Us Dollar Rates. The market was expected a rate cut from the us fed Meeting as the Us Presiding Continuous Pressed for it. However, Us Fed Chief Jerome Powell Didn Bollywood under the pressure of the white house and decided to keep us fed rates unchanged at 4.25% to 4.50%. A Rise in the Us Dollar Rates at Forex Exchange. Research at Profitmart Securities.

Stock-specific performance Dive

Within the nifty metal index’s 15 Constituents, Vedanta Led the Decline, Dropping over 2%. Hindustan Zinc Fell About 1%, While Other Heavyweights – Hindi Copper, SAIL, APL Apollo, NALCO, NMDC, and Tata Steel -Each Slid more than 0.5%. These stocks felt the combined impact of profit-taking and margin concerns due to rising dollar-denominated raw material costs.

In contrast, some names found resilience amid the slump. Jindal Stainless, JSW Steel, Jindal Steel, Lloyd Steel & Engineering, And Adani Enterprises Posted Modest ITRADAY GAINS, Fueled by Company-Specific Strength or Better-Your Better-Expected Expected Offset broad-sector softness.

Going ahead, analysts pointed to widening input-output price spreads and reduced expenses as primary headwinds. A Strong Dollar Makes Export Revenues Richer in Dollar Terms, but domestic purchases of imported steelmaking materials like coking coal, nickel, and ferroallys batuacome CostLier, Squeezing Margins.

A prolonged dollar rally-IF Accompanied by Rate Hikes in the US-Cold Further Dampen Global Metal Demand, Especially from Markets Like China Dependent Indian Producers, Who Might Control Supply Short-Term, Cold Face Demand Setbacks If Global Growth Slows.

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