Last Updated:
Shares of Vedanta, Tata Steel, NMDC and others fell up to 7% in early deals on Monday after US President Donald Trump imposed tariffs
Vedanta, NALCO, NMDC shares tank
Shares of Vedanta dropped 7% to Rs 410 on Monday’s trade on the BSE, following a surge in the US dollar against the Indian rupee and other global currencies.
The Indian rupee weakened beyond Rs 87 per US dollar for the first time after President Trump imposed tariffs on the country’s largest trading partners, leading to a spike in the US dollar.
Trump followed through with his threats, imposing 25% tariffs on Canada and Mexico, and a 10% levy on China, citing the need to address migration and fentanyl issues.
Since China is the largest importer of metals globally, any trade tensions involving the country could significantly impact the global demand for metals, adding more uncertainty for Indian metal companies.
In response, Canada and Mexico announced retaliatory measures, while China revealed plans to challenge the tariffs at the World Trade Organization. These tariffs, outlined in three executive orders, are set to take effect on Tuesday.
Meanwhile, the US dollar hit a record high against the Chinese yuan, its strongest level against the Canadian dollar since 2003, and its peak against the Mexican peso since 2022.
A stronger US dollar is viewed negatively for India’s metal sector as it makes exports less competitive by raising prices for international buyers and increases the cost of imported raw materials, which squeezes profit margins for domestic producers.
Metal Stocks Drop
Metal stocks took a hit on February 3, weighed down by the dollar index surge following Trump’s tariff moves, which sparked concerns of a widening trade war among major economies. Prices of base metals also dropped on the London Metal Exchange, adding to the pain for metal stocks.
Shares of NALCO and NMDC were hit hardest, falling around 6% each, followed by Tata Steel, Jindal Stainless, Hind Copper, Hindalco, and SAIL, which declined 3-5%. These sharp drops across metal stocks contributed to a 3% decline in the Nifty Metal index.
