NALCO shares tumble 9% as metal stocks retreat after 3-day rally. What's behind the slide?
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Shares of National Aluminium Company (NALCO) slid as much as 9.4% to Rs 388.45 on the BSE on Friday as a pullback in global and domestic metal prices, coupled with a strengthening U.S. dollar, triggered broad-based selling across metal stocks, snapping a three-day rally in the sector.
Elsewhere, metal prices weakened across major global exchanges. On the Shanghai Futures Exchange, aluminium declined 2.98%, lead fell 1.43%, nickel pulled back 3.25% and tin tumbled 6.41%, while zinc was the sole gainer, up 0.39%. On the London Metal Exchange, aluminium slipped 1.20%, zinc fell 0.50%, lead dropped 0.57%, nickel lost 2.25% and tin shed 3.78%.
Dollar strength, Fed uncertainty weigh
The sell-off in metals came amid a rise in the dollar index and growing uncertainty over U.S. monetary policy leadership. Markets are awaiting U.S. President Donald Trump’s announcement of his nominee for Federal Reserve Chair, which he said he intended to make on Friday, intensifying speculation that the central bank could tilt in a more hawkish direction once Jerome Powell steps aside in May.
Technical picture
From a technical perspective, NALCO continues to trade above seven of its eight key simple moving averages, including the 10-day, 20-day, 30-day, 50-day, 100-day, 150-day and 200-day SMAs, while remaining below its 5-day SMA. The Relative Strength Index stands at 82.3, a level considered strongly overbought, signalling the potential for a near-term pullback. The MACD, at 27.3, remains above both the centre and signal lines, indicating that the broader bullish trend is still intact despite Friday’s sharp correction.
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The broader Metal index dropped 4%, ending a three-session gaining streak during which it had risen 8.5%. The decline tracked a sharp retreat in gold and other base metals after their recent surge, while a firmer dollar added further pressure on commodity prices.
Elsewhere, metal prices weakened across major global exchanges. On the Shanghai Futures Exchange, aluminium declined 2.98%, lead fell 1.43%, nickel pulled back 3.25% and tin tumbled 6.41%, while zinc was the sole gainer, up 0.39%. On the London Metal Exchange, aluminium slipped 1.20%, zinc fell 0.50%, lead dropped 0.57%, nickel lost 2.25% and tin shed 3.78%.
In domestic trade, gold and silver futures on the MCX fell around 6% each, while copper and aluminium futures with February expiries declined by as much as 4% during morning trading.
Dollar strength, Fed uncertainty weigh
The sell-off in metals came amid a rise in the dollar index and growing uncertainty over U.S. monetary policy leadership. Markets are awaiting U.S. President Donald Trump’s announcement of his nominee for Federal Reserve Chair, which he said he intended to make on Friday, intensifying speculation that the central bank could tilt in a more hawkish direction once Jerome Powell steps aside in May.
Technical picture
From a technical perspective, NALCO continues to trade above seven of its eight key simple moving averages, including the 10-day, 20-day, 30-day, 50-day, 100-day, 150-day and 200-day SMAs, while remaining below its 5-day SMA. The Relative Strength Index stands at 82.3, a level considered strongly overbought, signalling the potential for a near-term pullback. The MACD, at 27.3, remains above both the centre and signal lines, indicating that the broader bullish trend is still intact despite Friday’s sharp correction.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
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