By Rutam Vora, Commodity Online Metal stocks witnessed heavy sellout in the opening hours on the Bombay Stock Exchange (BSE) leading a fall in the key benchmark index, BSE Sensex, which reeled lower by over 0.5% from its Monday’s close. Sectoral index, BSE Metals shed the maximum losses on Tuesday, June 22, 2010 after most Asian stocks fell on Tuesday on renewed concern over Europe's economic crisis after Fitch Ratings cut its debt rating on French bank BNP Paribas SA. Fitch slashed BNP's long-term rating to AA-minus, the fourth-highest investment grade, from AA on deteriorating asset quality. The key benchmark indices in Japan, South Korea, Singapore and Taiwan fell by between 0.01% to 0.86%. But the key benchmark indices in China, Hong Kong and Indonesia rose by between 0.12% to 0.3%. Back home Sensex opened with gap down this morning and traded at 17,786.88 points, while NSE Nifty index was down by 0.42% at 5330.65 points. Commodity Stocks including metal stocks and oil & gas stocks tumbled in the early trading hours on the BSE today. Iron ore miner, Sesa Goa Ltd (BOM:500295) shed the most at over 2.8% loss in the morning trades. The fall is attributed to the profit booking at the higher levels as the stock had risen by over 9% on Monday on the back of China’s modification in Yuan policy, which is believed to boost earnings prospects for the iron ore exporter. Other metal stocks included steel major, Tata Steel Ltd (BOM:500470) and copper miner, Sterlite Industries (India) Ltd (BOM:500900) fell by 1.45% and 2.65% respectively. Birla Group major, Hindalco Industries Ltd (BOM:500440) fell by close to 2% from its previous close. Copper prices declined on London Metal Exchange (LME) after hitting the monthly highs Monday, as gains on expectations of a stronger yuan were seen as overdone. Copper had gained as much as 4.6% yesterday, the most since May 18, following the news that the People’s Bank of China signaled an end to the 6.83 yuan peg to the dollar, lifting the country’s demand outlook. Copper had plunged more than 20% from an April peak on global economic concerns hurting demand. Copper for September delivery in Shanghai dropped as much as 2.2 percent to 52,500 yuan ($7,725) a ton and was at 53,000 yuan at the midday break. Shanghai aluminum fell as much as 2 percent to 14,710 yuan and zinc dropped as much 1.8 percent to 14,575 yuan. Copper and zinc both jumped by the 5 percent daily limits yesterday in Shanghai. US stocks closed lower on Monday, 21 June 2010, after investors lost steam about China's decision to make its currency flexible against the US dollar. The Dow Jones industrial average fell 8.23 points, or 0.08% at 10,442.41. The Standard & Poor's 500 Index was down 4.30 points, or 0.38% at 1,113.21. The Nasdaq Composite Index was down 20.71 points or 0.90% at 2,289.09. On the Energy Front, Crude oil futures on MCX were down 0.03% Tuesday tracking similar trends in international markets. Crude oil futures on New York Mercantile Exchange were tad down today giving up their previous gains as euphoria about China's flexible currency regime faded. Meanwhile, Indian oil stocks including country’s largest private sector oil company, Reliance Industries Ltd (BOM:500325) tumbled by close to 0.4% paring the gains on Monday. Other private sector oil explorers, Essar Oil Ltd (BOM:500134) fell by 0.24% and Cairn India Ltd (BOM:532792) fell by 0.87% in the early trading hours on the BSE today. Media reports mentioned that Iran has discovered 2.19 trillion cubic feet of in-place natural gas reserves in the existing field of Toos. On the other hand, China plans to double the share of natural gas consumption to 8% from the current 4% of its total energy consumption basket by 2015, indicating positive outlook for the price situation in Natural Gas.

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