Metal stocks get whacked!

The BSE Metal Index is literally bleeding today; the entire counter is pained a deep hue of red with all the metal stocks on the slump. Tata Steel leads the pack, followed by Jindal Steel, Vedanta, SAIL, Hindalco, National Aluminium, JSW Steel, NMDC, Hind Zinc.

This was an expected reaction today morning what with Trump unleashing a trade war with China.  Trump, yesterday announced tariff’s of at least $50 billion on Chinese imports, saying that this was in response to get compensation for alleged intellectual property abuses by China.

China responded swiftly to this – it announced reciprocal tariffs on $30 billion of imports from USA which included things like pork, aluminium, dried fruits, nuts, modified ethanol, ginseng, steel pipes, fruits and wines. These products could see duty hikes anywhere in the range of 15 to 25%.

In India, those in the metal sector say that there is really nothing to worry about as iron & steel and aluminium exports to US constitute only 0.29% of India’s total exports. Yet, the market is edgy following the rout on the US markets yesterday and impact or no, this tariff war makes global trade very uncomfortable.