In global markets, three-month copper on the London Metal Exchange tumbled as much as 8.7 per cent, while Shanghai copper fell by its maximum daily limit of 5 per cent because of global economic concerns and a wave of stop-loss orders.
"The drop in crude oil and other commodities is leading to strain in certain global banks. Due to this, we could see commodity selloff which would be applicable to the London Metal Exchange kind of stocks. We could see a metal shock on the LME coming soon just like crude shock," said Mahantesh Sabarad, deputy head (research) at SBICap Securities.
Domestic metal companies came under a sharp selloff on Wednesday, with the BSE Metal index plunging 3.5 per cent, tracking a fall in global commodity prices. Among frontline stocks, Sesa Sterlite slumped 8 per cent to Rs 188 while Hindalco fell 6.3 per cent to Rs 142 and Tata Steel declined 3.4 per cent to Rs 376. In comparison, Nifty ended 0.26 per cent lower at 8,277.
The sentiment in metals like copper took a beating after the World Bank on Tuesday lowered its global growth forecasts for 2015 and next year due to disappointing prospects in the euro zone, Japan and some major emerging economies.
The selloff in metals is likely to further weigh on market sentiments at a time when crude oil prices have slumped to near six-year lows after falling more than 50 per cent since June 2014. (With Agency Inputs)