07 Apr , 2025 By : Debdeep Gupta
Metal stocks plunged sharply on April 7 due to rising uncertainty over retaliations to Trump's tariffs, with heavyweight Tata Steel crashing 10 percent to hit the lower circuit, as a strong downturn pulled the Nifty Metal index lower by nearly 7 percent to a one-year low on April 7.
The fall in the metal stocks is in line with the overall weakness, following the major crash on Monday morning, as US President Trump's reciprocal tariffs rattled global markets and triggered fears of a tariff war. As a result of the uncertainty, the US index futures too are under selling pressure, with S&P 500 futures lower by 4 percent as of 10:00 am.
Lloyds Metals and Energy and National Aluminium Company tumbled over 9 percent, while those of SAIL, Hindustan Copper, Vedanta Limited, and Hindalco plunged over 6 percent. JSW Steel, Hindustan Zinc, and Jindal Steel and Power shares, meanwhile, dropped over 5 percent.
Adani Enterprises, NMDC, Welspun Corp, and other metal stocks were also trading in the deep red, with losses of more than 4 percent.
VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said, "Globally markets are going through heightened volatility caused by extreme uncertainty. No one has a clue about how this turbulence caused by Trump tariffs will evolve. Wait and watch would be the best strategy in this turbulent phase of the market."
Vijayakumar added that investors should bear in mind that the uncertainty may not last too long, and India has been relatively better-placed than most Asian peers. "There are a few things that investors should keep in mind. One, the irrational Trump tariffs will not continue for long. Two, India is relatively better placed since India’s exports to the US as a percentage of GDP is only around 2 percent, and therefore the impact on India’s growth will not be significant. Three, India is negotiating a Bilateral Trade Agreement with the US, and this is likely to be successful, resulting in lower tariffs for India."
US President Trump had imposed a 25 percent tariff on steel and aluminum imports earlier in March, and hinted at a tariff on copper imports as well. While his recent reciprocal tariff announcement didn't include metals, investors are concerned over the impact as countries like China retaliate to US tariffs, resulting in trade wars.
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