Indian metal stocks took a hit following China’s announcement of a substantial debt swap plan worth $839 billion aimed at alleviating the financial burdens of local governments. The move, confirmed at China’s National People’s Congress (NPC) session, has raised concerns over the underlying economic health of China, the world’s largest consumer of metals. This cautious sentiment among global investors has directly impacted metal stocks in India.
The debt swap plan, combined with China’s decision to increase the 2024 local government debt ceiling to 35.52 trillion yuan, is intended to give local authorities more fiscal flexibility. China’s Finance Minister, Lan Fo’an, along with the Budget Committee, indicated that this refinancing strategy is designed to address significant off-balance-sheet liabilities. The news led to slight declines in both the CSI 300 and Hang Seng indices, reflecting market apprehensions over potential slowdowns in demand for metals and industrial commodities.
Metal Stocks Declining in India
As investor sentiment turned cautious, several major Indian metal stocks witnessed a downturn:
- Coal India: ₹423.15, down 2.80%
- APL Apollo: ₹1,499.50, down 1.63%
- Hindalco: ₹652.90, up 0.74%
- Hind Zinc: ₹507.90, up 0.06%
- Jindal Steel: ₹923.55, down 2.54%
- JSW Steel: ₹983.00, down 0.69%
- MOIL: ₹327.20, down 3.25%
- NALCO: ₹238.20, down 0.18%
- NMDC: ₹232.20, down 2.81%
- Ratnamani Metal: ₹3,599.80, down 1.98%
- SAIL: ₹118.05, down 4.30%
- Tata Steel: ₹148.16, down 1.85%
Outlook
With China’s emphasis on refinancing and potential future stimulus, the global metals market remains in a state of anticipation. Investors are closely monitoring China’s next steps, particularly any additional fiscal packages that may address economic slowdowns. For now, the cautious approach in China’s policy measures has dampened demand expectations, leading to weakness in Indian metal stocks. As the situation develops, global metal markets are likely to react to further announcements from China.
