Nifty Metal Index Drops Further Amid Sharp Tariff Escalation; Market Reels from Growing Recession Risks
The Nifty Metal index declined over 1.5% on April 9, extending a four-session losing streak that has seen the index shed a steep 11%, following an unprecedented escalation in trade tensions between the United States and China. The sharp downtrend in metal stocks was triggered by US President Donald Trump’s announcement of a cumulative 104% tariff on Chinese imports, marking one of the most aggressive moves in the ongoing global trade conflict.
Among the sector’s major constituents, Tata Steel, JSW Steel, Hindalco, and Hindustan Zinc shares each fell by up to 2%, reflecting investor fears that the new trade barriers will have a deep impact on global growth and further suppress international metal prices.
Nifty Metal index falls 1.5% on April 9
11% drop recorded over last four trading sessions
JSW Steel, Tata Steel, Hindalco, Hindustan Zinc down up to 2%
Fears rise over global slowdown and falling commodity demand
Trump’s 104% Tariff on Chinese Goods Triggers Market Anxiety
Until March-end, the US maintained a 10% average tariff on Chinese imports. But in early April, Trump announced “reciprocal” tariffs, initially raising duties by 34% and implementing a base 10% tariff on all countries, effectively bringing tariffs on Chinese goods to 54%. In retaliation to China’s 34% tariff on US imports, the US imposed an additional 50% tariff, resulting in a combined 104% tariff burden on Chinese imports.
This dramatic escalation sent shockwaves across global equity and commodity markets. China, as both a major producer and consumer of base metals, plays a pivotal role in shaping global pricing. Analysts warn that an aggressive tariff regime may choke demand, deepen supply chain disruptions, and contribute to metal price deflation on a global scale.
US raises tariffs on Chinese goods from 10% to 104%
China retaliates with 34% tariff on US products
Escalation threatens supply chains and cross-border trade flows
Concerns rise over price suppression in global metal markets
Broader Metal Stock Weakness Reflects Deepening Concerns
Following the sharp tariff hikes, metal stocks across the board have been severely impacted. Over the past four sessions:
Tata Steel, SAIL, JSW Steel, and NALCO have registered declines of up to 15%, tracking global commodity concerns
Investor sentiment remains fragile amid potential trade disruptions and waning demand from China and the US
The Nifty Metal index, previously a strong performer due to optimism over infrastructure-led domestic growth, has now turned one of the weakest sectoral indices in April, underperforming the broader market.
Analysts Caution on Metal Price Outlook Amid Global Uncertainty
In a recent sector note, Prabhudas Lilladher highlighted the significant risks posed by the tariff escalation. The brokerage firm noted that supply chain bottlenecks, input cost inflation, and reduced industrial demand could combine to hurt profitability across global metal companies, especially those with export exposure.
“Rising trade tariffs have significantly increased the risk of supply chain bottlenecks, elevated inflation, and a broader slowdown in global economic activity—all of which have put downward pressure on commodity prices,” said the note.
Experts are now urging close monitoring of:
Global recession risks and GDP downgrades
China’s economic response to US trade aggression
Input cost trends for domestic and export-focused metal firms
Resilience of India’s domestic infrastructure-led demand
China’s Economic Stability Under Threat, Global Growth Faces Headwinds
As the world’s second-largest economy, China’s growth trajectory plays a critical role in global metal demand. With analysts warning that the aggressive US tariffs could derail China’s post-COVID recovery, global markets are bracing for a period of elevated volatility, especially in commodity-heavy sectors.
Economists point out that the US and China together account for roughly 45% of global GDP, and a prolonged trade standoff between the two could significantly damage global economic momentum, which would in turn impact investment-led sectors like metals and infrastructure.
While India has maintained a relatively neutral stance and is in the midst of bilateral trade negotiations with the US, its export-reliant metal industry could still be collateral damage in a global demand contraction.
US-China together account for 45% of global GDP
Aggressive tariffs may hurt China’s demand for raw materials
India’s metal exports at risk amid global demand slowdown
Tariff war may prolong global economic instability and volatility
