Shares of metal companies like JSW Steel, Hindalco Industries, Vedanta, Tata Steel were trading as top losers on Monday amid a surge in the number of new coronavirus cases reported beyond China and on worries over its impact on global economic growth.
Backed by heavy selling pressure in metal scrips, Nifty Metal index was the top loser among sector-based indices, falling 3.20% to 2,528.75 points against 1.08% decline in Nifty 50 index.
Jindal Steel and Power (JSPL) fell more than 5% on NSE, followed by 4.05% decline in JSW Steel. Hindalco Industries, Tata Steel, SAIL and Vedanta declined over 3% each. MOIL lost over 2% on NSE.
The fall in the metal stocks was in line with the broad-based bearish trend in the market following reports of hundreds of new cases of Covid-19 infections that were reported over the weekend.
China continues to battle the coronavirus outbreak that has killed more than two thousand people and disrupted factories and businesses in the world's second-largest economy.
Rising cases of Covid-19, a global health emergency has disrupted economic activity in China and any fall in demand in China could result in a downward trend in steel prices that will have a major impact on the global steel industry.
This follows President Xi's speech on Sunday in which he warned of the economic impact of the virus on the country, the world's largest consumer of the metal.
International Monetary Fund Managing Director Kristalina Georgieva at weekend meeting of the world's top 20 economies, known as the G-20, also said that China will see a sharp fall in first-quarter economic growth.
Amid the worsening outbreak in China, a rising number of infections in Iran, Italy and South Korea also heightened worries of the global economic slowdown. South Korea was on high alert after the number of infections surged to over 600 with six deaths, making it the world's largest total outside China.
"Despite domestic prices remaining relatively resilient, we see risk in the near term, primarily from higher export volumes from China," said Edelweiss in its report and maintained 'BUY' on JSPL and Tata Steel, 'HOLD' on JSW Steel, and 'REDUCE' on SAIL.