Coronavirus fallout fears hurt stocks of metals, mining cos

Shares of Indian metal companies came under pressure on Monday as traders panicked over the economic impact of the outbreak of coronavirus in China, which is the largest metals consumer and producer in the world, contributing nearly half of the total global demand and supply.Shares of companies including Hindalco, Vedanta, Tata Steel, JSW Steel and Jindal Steel fell by 3-6 per cent. A similar slump was seen in the stocks of global companies including Rio Tinto, Rusal, Vale and Glencore, which fell by 3-4 per cent. Indonesian coal mining companies such as Bumi and Adaro energy crashed by 9 per cent and 6 per cent respectively on local bourses.However, the prices of underlying metal commodities did not exhibit selling pressure. Prices of aluminium, copper and zinc have fallen by 2.3 per cent and 3.7 per cent in the past three trading sessions on the London Metal Exchange. Steel is a more domestic commodity and does not trade on the global metal exchange.The outbreak of the virus is expected to disrupt trade in the short term. Whether this will benefit Indian companies is yet not clear. “It is too early to comment,” said Amit Desai, metals analyst with Edelweiss. “The reactions we are seeing have more to do with sentiments than fundamentals,” he added. 73683119

from Economic Times https://ift.tt/2O5jLGb