Aluminium stocks fell as much as 5 percent on Tuesday after an interim agreement between the US and Iran reduced concerns over supply disruptions. The development is expected to lead to lower prices and renewed imports.
Shares of companies including Hindalco Industries, Vedanta Aluminium and National Aluminium Company declined sharply following the news of the deal. Analysts noted that the easing of tensions would allow imports to resume, removing premiums that producers had enjoyed during the period of heightened geopolitical risk.
Market observers pointed to pressure on the broader sector in the near term. The Nifty Metal Index and prices on the London Metal Exchange reflected similar downward movements as investor sentiment shifted.
The interim US-Iran deal directly addressed supply worries that had driven recent gains in aluminium prices. With the immediate threat reduced, further price declines are projected in coming sessions.
