The markets are extremely cautious in today’s trade, and one of the key sectors that has been battered in trade today is the metal stocks. The Nifty Metals Index tumbled over 4% to a low of 11,353.05. It saw the maximum loss among sectoral indices today. Key shares like NALCO have nosedived nearly 7%. Hindalco Industries too has plunged as much as 5% today.
Jindal Steel, Lloyds Metals & Energy, Steel Authority of India (SAIL), Hindustan Zinc, Tata Steel, and many others followed suit. All the constituents of the Nifty Metal Index are trading in the red. The catalysts triggering the sharp sell–off are the escalation of the West Asia crisis. Crude oil and energy prices surged amid buzz that Iran could potentially shut the Strait of Hormuz.
Hormuz crisis: Iran’s warning triggers concern
Iran’s new supreme leader, Ayatollah Mojtaba Khamenei, said the Strait of Hormuz should remain closed. He also warned Iran could open additional fronts against the US and Israel if the war continues.
Iran’s missile and drone attacks across the region have disrupted markets and pushed energy prices higher, with Brent nearing $100 a barrel.
Crude oil prices
The WTI crude futures rose to about $95 per barrel on Friday morning following a sharp two-day rally. Brent crude was trading at $100 a barrel in the international market.
The US President Donald Trump emphasised that preventing Iran from acquiring nuclear weapons and threatening the region outweighed oil price concerns.
Tanker disruptions in the Gulf have effectively removed 20% of global oil trade, forcing GCC countries to cut output by 10 million barrels per day as storage reached capacity. The IEA described this as the largest disruption in oil market history, prompting a coordinated 400 million barrel release from strategic reserves.
Metal prices correct globally
Surprisingly, despite the spike in global risk and escalation in the Hormuz conflict, key metal prices saw a sharp correction. Starting from precious metals like gold and silver to base metals like copper, aluminium, and zinc, they have seen sharp corrections. Concerns about the next Fed chairman and the dollar’s rebound have kept sentiment muted globally.
Indian markets
The domestic benchmarks opened Friday’s trade on a lower note, stretching the losing streak to the third day. The Nifty 50 slipped to 23,300, and the Sensex was down around 900 points.
Apart from metal stocks, the auto index has been on a losing streak. The automobile index has dropped around 3% in today’s trade. Bharat Forge was the major loser, followed by Ashok Leyland, Tata Motors, Hero MotoCorp, UNO Minda, etc.