Vedanta, NMDC, and other metal stocks drop up to 7% amid US dollar rebound and trade war fear

Metal shares plunged up to 7% on Monday, following concerns over a trade war after the US imposed import duties on China, Mexico, and Canada.

Dragged by losses in leading metal stocks, the NIFTY Metal index declined nearly 4% to hit a low of 7,979.55 points in early trade. The index was down 2.41% at 8,098 points at 12.35 pm while the benchmark NIFTY50 was down 0.89% at 23,286 points.

Among major losers, Vedanta Ltd dropped by nearly 7% to a low of ₹410 per share in early trade on NSE. The stock later recovered some losses to trade 4.61% lower at ₹419.6 per share. SAIL dropped 4.53% to trade near the day’s low at ₹101.7 per share.

Rebound in US dollar after tariff hikes dragged metal shares

A surging dollar, which traded over 1% higher at 109 levels after US President Donald Trump imposed tariffs on Mexico, Canada and China, dragged the metal shares. Base metal prices dropped on the London Metal Exchange, which also hit metal shares.

Investors are concerned about a possible trade war among leading economies, which could derail global growth. China is a major importer of metals, and any tariff hike would impact its exports, which could affect metal demand and lead to the dumping of cheap metal in Indian markets.

A strong dollar also hit the competitiveness of metal companies in non-dollar-denominated markets like India.