Election Results 2024: Metal Index Crashes 10% – NALCO, SAIL, NMDC, Hindustan Copper Drop Up to 19%

In the wake of the 2024 election results, the Nifty Metal index plunged more than 9% on Tuesday. Major stocks like NALCO, SAIL, NMDC, and Hindustan Copper saw their prices fall by 15-19% during intraday trading, leading the index’s decline.

The drop was primarily driven by public sector companies such as National Aluminium Company (NALCO), Steel Authority of India Ltd (SAIL), NMDC, and Hindustan Copper. Investor confidence in these companies was shaken when early trends showed that the ruling Bharatiya Janata Party-led National Democratic Alliance did not receive the expected mandate in the Lok Sabha elections.

Other metal companies like Tata Steel, Jindal Steel and Power, JSW Steel, Hindalco Industries, Vedanta Ltd, and Hindustan Zinc Ltd also experienced significant declines, falling 6-9%.

According to a domestic brokerage analyst, confidence in steel demand had been high due to government-led infrastructure spending. However, the election results not meeting expectations impacted investor sentiment.

APL Apollo Limited also saw its share price drop by more than 5%.

Despite the current market volatility, analysts remain positive about metal stocks but are cautious until the government formation is complete. They are also keeping an eye on China’s demand, as China is the largest producer and consumer of commodities. Stronger demand from China could push up international steel prices, benefiting companies like Tata Steel, Jindal Steel and Power, JSW Steel, SAIL, and NMDC.

Base metals such as aluminum, copper, and zinc have seen price increases on the London Metal Exchange, which is good news for Hindalco Industries, Vedanta Ltd, Hindustan Zinc Ltd, and NALCO. Aluminum prices rose from $2100 per tonne in January to $2600 per tonne. Copper prices increased from $8000 per tonne in February to over $10,000 per tonne. Zinc prices also climbed from below $2300 per tonne in February to more than $2900 per tonne.

Satish Pai, Managing Director of Hindalco Industries, and Anil Agarwal, founder and Chairman of Vedanta Group, recently stated that they expect aluminum demand to remain strong in India.