The Nifty Metal index on Thursday ended 2.58% lower. The major laggards of the index were Hindalco Industries Ltd, Jindal Steel & Power Ltd, and Tata Steel Ltd, which closed 3% to 5% lower.
Shares of JSW Steel Ltd, Steel Authority of India Ltd, Welspun Corp Ltd, Vedanta Ltd, and National Aluminium Company Ltd were down over 2% each. The three positive contributors to the index were Hindustan Zinc Ltd , Adani Enterprises Ltd, and Jindal Stainless Ltd.
Analysts believe that the metals were weak today on the back of huge sell-off in commodities in the US markets in the previous trading session.
The base metals pack suffered a loss by the wider selling, according to Prathamesh Mallya, AVP- Research, Non-Agri Commodities, and Currencies, Angel One Ltd.
Metal prices on Wednesday behaved similarly to Tuesday. With losses of more than 3% each, copper and aluminum were among the worst performers.
"A strengthening dollar hindered holders of other currencies, which led to a decline in copper prices. Concerns about the banking crisis was another factor that contributed to the steep decline in metal prices. Optimism on the Chinese front as economic activity picked up in the first two months of 2023 failed to lift up metal prices," said Mallya.
This week so far, the Nifty Metal index has lost 3.5%.
On the technical front, analysts expect the short term trend to be negative, and below 5,800 levels.
"We had a strong gap down opening in the metal index and in metal counters, despite bounce back in broader markets this space is under pressure, as of now trend remains down and counters like Hindalco, Jindal Steel and Power are showing more weakness for the next few sessions," said Rajesh Bhosale - Equity Technical and Derivative Analyst, Angel One.