Metal stocks tumble amidst broader market gains, Vedanta’s Hindustan Zinc stake sale adds to sector woes. Check list

In a bearish turn for the metals sector, the Nifty Metal index plunged 1.27 per cent to 8,843.60 points in mid-morning trade on Wednesday, August 14, 2024. This decline comes amid small gains in the broader market, with the Nifty 50 hovering above the 24,100 level.

The metal index's fall was led by significant drops in several key players.

NMDC saw the steepest decline, falling 3.99 per cent to ₹215.51. Ratnamani Metals & Tubes followed closely, dropping 3.54 per cent to ₹3,472.80. Hindustan Copper also experienced a sharp downturn, losing 3.50 per cent to trade at ₹302.00.

Other major losers included Tata Steel, down 2.46 per cent to ₹145.22, and National Aluminium Company (NALCO), which fell 2.27 per cent to ₹166.03.

Vedanta and Hindalco Industries, two heavyweight constituents of the index, also traded lower. Vedanta declined 0.59 per cent to ₹419.85, while Hindalco slipped 0.22 per cent to ₹620.05.

Other major players in the metal sector weren't spared either. NMDC saw the steepest decline, falling 3.99 per cent to ₹215.51, while Ratnamani Metals & Tubes and Hindustan Copper also experienced sharp downturns, dropping 3.54 per cent and 3.50 per cent respectively.

However, not all metal stocks were in the red. JSW Steel managed to buck the trend, rising 1.46% to ₹922.20. APL Apollo Tubes also showed resilience, gaining 0.70% to trade at ₹1,421.10.

The downturn in metal stocks comes despite the broader market showing small gains. At 11:27 IST, the S&P BSE Sensex was up 0.12 per cent at 79,045.66, while the Nifty 50 index added 0.03% to reach 24,146.15.

Major development in the steel sector

On Tuesday, Vedanta announced plans to sell up to 11 crore shares, representing a 2.6% stake in Hindustan Zinc, through an offer for sale (OFS). This move has sent ripples through the metal market, potentially contributing to the sector-wide decline.

The announcement came after market hours on August 14, when Hindustan Zinc's shares had already closed 4.57 per cent lower at ₹586.35 on the BSE. Vedanta's shares also experienced a decline of over 2 per cent, ending at ₹422.70.

Vedanta's official statement read, "We wish to inform you that the duly authorised Committee of Directors of Vedanta Limited, at its meeting held today on August 13, 2024, has approved the sale of up to 11,00,00,000 equity shares of Hindustan Zinc, representing 2.60% of the issued and paid-up equity share capital of HZL, by way of an offer for sale through the stock exchange mechanism."

The fallout from this news was evident in Wednesday's trading session. Vedanta's stock price fell further, dropping 0.59 per cent to ₹419.85. Hindustan Zinc also saw a decline, with its shares down 0.17 per cent to ₹579.00.