Shares of top metal companies like Tata Steel and SAIL slipped on July 16, with the Nifty Metal index turning out to be the worst-performing sector of the day. The selloff came as the US dollar gained strength, triggering a broader risk-off sentiment in global commodities.
The rise in the dollar followed fresh US inflation data for June, which signaled continued price pressures possibly linked to President Donald Trump’s tariff measures.
The stronger dollar dampens global demand for metals, as it makes commodities more expensive for buyers using other currencies. As a result, Indian metal stocks were hit, pulling down the entire sector.
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Nifty Metal Under Pressure
The Nifty Metal index slipped into the red, dragged lower by weakness in major names including Tata Steel, SAIL, and other frontline metal players. This decline came even as broader markets tried to stay afloat.
The rupee also opened 18 paise lower, tracking dollar strength, which further weighed on sentiment in export-heavy sectors like metals.
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What Triggered the Dollar Surge?
The US dollar’s sharp rise was driven by inflation data for June, which showed continued upward pressure. Market participants believe this reduces the likelihood of a Federal Reserve rate cut shortly, thereby supporting the dollar further.
Tariff-led inflation concerns in the US are beginning to spill over into global markets, and metal stocks are among the first to react.
With the global economic environment getting more uncertain, investors are staying cautious on cyclical sectors like metals.
