Shares of metal companies came under heavy selling pressure on Monday with the Nifty Metal index slipping 4.5 per cent on the National Stock Exchange (NSE) in the intra-day trade. The index was quoting lower for the third straight trading day and has slipped 7 per cent during the period. Further, it has corrected 9 per cent from its record high level of 5,936.10, touched on August 16, 2021.
Among individual stocks, Tata Steel, Jindal Steel and Power, Hindalco Industries, National Aluminium Company, JSW Steel, Steel Authority of India (SAIL), Vedanta and NMDC dropped between 5 and 7 per cent in the intra-day trade today. At 01:52 pm, the Nifty Metal index, the top loser among sectoral indices, was down 3.78 per cent as compared to a 0.31 per cent decline in the Nifty50 index.
The goods and services tax (GST) rate on ores and concentrates of metals such as iron, manganese, etc, has been raised from 5 per cent to 18 per cent. However, according to ICICI Securities, as steel already attracts a GST rate of 18 per cent, the increase in GST rate of iron ore will not impact steel companies as steel players would avail input tax credit for iron ore.
"Meanwhile, currently, domestic Hot Rolled Coil (HRC) prices are at a significant discount to regional prices as mills try to increasingly tap into export markets due to subdued domestic demand. Domestic prices are at a discount of around 20 per cent to landed price of imports, which rules out any pressure from imports. This coupled...
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