Nifty Metal index hits two-month low; Hindalco, Vedanta down 3%

STOCK MARKET - Shares of metal companies were trading under pressure with the Nifty Metal index hitting its two-month low on the National Stock Exchange (NSE) on weak base metal prices.

Hindalco Industries, Hindustan Zinc and Vedanta dipped 3%, Hindustan Copper, Jindal Steel and Power, Tata Steel and National Aluminium Company (Nalco) down 2% on the NSE.

At 11:39 AM; the Nifty Metal index, the largest loser among the sectoral indices, was down 1.8% at 3,536 points as compared to 0.46% decline in the benchmark Nifty 50 index. The metal index hit an intra-day low of 3,535, its lowest level since October 3, 2017.

In past one month, Nifty Metal index has underperformed the market by falling 10.5% against 3.6% decline in the benchmark index. Hindalco Industries, Nalco, Vedanta, Moil, Hindustan Copper and Hindustan Zinc were down more than 11% during the period.

LMEX, a gauge of six metals traded on the London Metal Exchange (LME) was down 2.8% at 3,115 on Tuesday, closed at its lowest level since September 27, 2017. The index has fallen 5.3% in past seven trading sessions on LMEX.

Shanghai copper fell more than 3% on Wednesday, tracking a steep drop on the LME as investors wound in profits on concerns China could see a weaker first half of next year, the Reuters report suggested. CLICK HERE TO READ FULL REPORT.

Markets check: Buy DHFL, Hindustan Zinc and Thermax

STOCK MARKET - Few trading ideas by Vaishali Parekh, Research Analyst - Technical Research at Prabhudas Lilladher:

NIFTY VIEW:
Nifty after correcting nearly by 50% of the recent swing has for now taken support at 10,100 levels. Market has witnessed a good bounce back rally from here, what now needs to be seen if Nifty manages to move past 10350 levels decisively for this rally to continue. The support for the day is seen at 10170 while resistance is seen at 10260.

BUY DHFL
CMP: Rs 623.50        
TARGET: Rs 685          
STOP LOSS: Rs 590
The stock is in an upward trend and now it has made a higher bottom formation pattern in the daily chart taking support at the significant moving average of 34-WMA and looks potentially attractive for further upside movement in the coming days. The stock looks poised for further gains and also the RSI has indicated a positive trigger signaling a buy and with good volume activity seen, we recommend a buy in this stock for an upside target of Rs 685 keeping a stop loss of Rs 590.

BUY HINDUSTAN ZINC
CMP: Rs 301.80        
TARGET: Rs 328            
STOP LOSS: Rs 288
The stock has more or less formed a higher bottom formation in the daily chart taking support at the 200-DMA which was at Rs 294. The stock looks attractive for an up move with potential and strength indicated with a positive bias. The RSI has also indicated a reversal in its trend and supports our view of a bullish run in the coming days. With decent volume participation witnessed, we recommend a buy in this stock for an upside target of Rs 328 keeping a stop loss of Rs 288.