SHARP FALL IN SGX IRON ORE PRICES OWING TO UNDERWHELMING CHINESE STIMULUS
News: As per media sources, SGX Iron Ore prices had a sharp decline of ~4% to $106/tonne owing to lack of any new stimulus measures by China.
View: This is sentimentally negative for the overall metal index, given a new stimulus announcement by China would have boosted the demand and curb exports from the country. With a sharp decline in iron ore prices, metal stocks down sharply in trade yesterday in the range of 2-8%. Going forward, however we expect macroeconomics and geopolitical situations to weigh on metal prices. Thus, from the long-term perspective in the metal space we continue to like JSW Steel, Hindalco, Coal India and NMDC in our coverage universe.
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