Commodity, energy stocks plunge
The BSE Metal index declined nearly 5%, while the BSE Energy was down by 2.5%. Metal stocks such as Tata Steel, SAIL, Jindal Steel, and JSW Steel declined between 4% and 5%.
![Commodity, Energy Stocks Plunge Commodity, Energy Stocks Plunge](https://img.etimg.com/photo/msid-42031747,quality-100/et-logo.jpg)
“Commodity stocks are seeing a decline largely due to cool-off in commodities price as well as uncertainty in global markets, citing the resurgence of Covid-19 cases in China,” said Ajit Mishra, analyst at Religare Broking. “Going ahead, we expect commodity-driven sectors like metal, mining, oil to remain highly volatile.”
After a sharp rally over the past month in the wake of the Russia-Ukraine war, metals – ferrous and non-ferrous – and crude have seen a reversal. Prices of base metals like aluminium declined 3%, while zinc and lead have corrected 8% each. Global steel prices have corrected by 4% over the past week, while iron ore prices have fallen by 12% over the same period.
“The fresh outbreaks of Covid-19 in China and Hong Kong has threatened to slow the pace of broader recovery, which clouded the demand outlook for industrial metals,” said Pankaj Pandey, head of research at ICICI Securities. “This is a temporary setback, but it doesn’t mean that the story for metal stocks is over. Structurally Indian metal companies are well-positioned for mid- to long-term growth.”
“Domestic steel demand is expected to improve with higher outlay on infrastructure and price outlook is supported by firm international prices,” said Pallav Agarwal, analyst, Antique Stock Broking.
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