The stocks of Sterlite Industries hit its 52 week low when the economic data of China giving weak signals was released. The price at which it hit the bottom was Rs.118.60.on the BSE.
This was mainly due to the selling pressure the company faced post the economic data of China came out which is supposedly the biggest consumer of copper and aluminum in the world.
Sterlite is the largest producer of copper in the country and in this scenario, the economic tumble of the largest consumer of copper certainly affects the sentiments. India exports copper to many Asian nations of which China composes a significant majority. The consumption of copper had also been increasing every year by China as per the reports published in the website of Sterlite Industries.
The economic slump of China is also not surprising because it was bound to be affected by the turbulence we have been witnessing is the US and the European economy. The cut in prices of the metal by 5% was done for the very first time since the past 3 months after the company saw a decline on the LME, London Metal Exchange, where the company has been officially registered to boost exports and international trade.
The trend is likely to continue in the near future mainly because the LME has also hit its 10 month very recently and trickle-down effect on the company will be seen sooner or later.
‘Bell the Bull’ says that given the sad scenario of copper along with other metals, it shall be a good decision to hold back the stock and wait for it to bounce back after we see some stability and comeback in the US economy.