Metal index drags the market down, tumbles 5 per cent

Metal index was the top loser in the NSE sectoral indices and tumbled more than 5 per cent from the previous close. This was majorly in the wake of continued fall in the global alumina prices which fell 3 per cent in today’s trade. The prices fell ahead of Alcoa workers’ decision to call-off the strike, which would ease alumina supply. 

All the stocks in Nifty Metal index ended in the red with Coal India losing the least with 3.3 per cent loss. On the other hand, Jindal Steel, which holds 3.5 per cent weightage in the index, was the top loser with 12.4 per cent loss. Tata Steel and Vedanta, which hold highest weightages of 18 per cent and 17 per cent, tumbled more than 5.2 and 3.5 per cent, respectively. 

Nifty metal index had given a downward sloping channel pattern breakout along with an inverse head & shoulders pattern breakout within the channel during August end. Thereafter, the index climbed up gradually near its previous major resistance at 3,705 level. The index witnessed range-bound movement from the start of September from 3,540 to 3,730. 

On September 28, the index gave a range breakdown and fell up to the breakout level yet again. Now, whether it’s a pullback or a reversal is the matter to be watched.